Question & Answer » Search (loan)
1
Question: Can I take an urgent loan from a non-Muslim bank, even if I know that the bank will charge interest?
Answer: If a Muslim intends to get a loan from such banks, it is necessary that he should do so with the intention that it is a transaction without return, even if he knows that he will end up paying the capital as well as the interest. And he should not do so with the intention of getting the loan with the condition of [paying] interest.
Interest
2
Question: If I have taken loan from my company where I am working and have still not completed my installments i.e. my loan is still not paid & some balance is to be paid. Is it permissible for me to perform Hajj?
Answer: There is no objection to making the Hajj pilgrimage to Mecca, but due to your debt which has not been paid as yet, your Hajj would not be considered Hajjat al-Islam (obligatory Hajj).
Hajj - Ability
3
Question: Some trading and manufacturing companies get loans from private or state banks in Muslim countries and also from other [non-Muslim] institutions with the condition of interest; and they also earn interest on the deposits they leave in those banks.
Are we allowed to buy shares from these companies or be partners in their ventures?
Answer: If the partnership with them is like participating in their interest-bearing activities, it is not allowed. However, if Muslims own the company and it receives interest from the banks of non-Muslims, there is no problem [in buying its shares or partnership] from this perspective.
Modharabah (Sleeping partnership)
4
Question: What is the [minimum] limit of the difficulty (al-haraj) that lifts the prohibition? Is exorbitant price [for a halãl item] that could still be bought with [financial] strain or by getting a loan a [valid] example that would make a harãm [but cheap alternative] item permissible religiously?
Answer: The circumstances are different in this [case], and the criterion is the extreme hardship that is not normally tolerable.
Loan
5
Question: It is permissible to deposit money with national banks, in other words loaning the banks?
Answer: This, however, must be done without making a provision for charging interest on the money deposited, meaning not stipulating that the banks should give an undertaking to pay the interest on the loan. The opposite of this is that the depositor reaches a conclusion that if the bank was not going to pay the interest, he would not demand it. The intent to demand the interest does not contradict the non-stipulation. Similarly, the intent not to demand the interest does not contradict stipulation. That is because each of which is alien to the other.
Given that the bank is governmental, if he receives any interest, he should give half of the interest to faithful needy Shia Muslims and use the other half.
Depositing Money
Given that the bank is governmental, if he receives any interest, he should give half of the interest to faithful needy Shia Muslims and use the other half.
6
Question: Some trading and manufacturing companies get loans from private or state banks in Muslim countries and also from other [non-Muslim] institutions with the condition of interest; and they also earn interest on the deposits they leave in those banks. Are we allowed to buy shares from these companies or be partners in their ventures?
Answer: If the partnership with them is like participating in their interest-bearing activities, it is not allowed. However, if Muslims own the company and it receives interest from the banks of non-Muslims, there is no problem [in buying its shares or partnership] from this perspective.
Loan
7
Question: A Muslim took a loan from another Muslim. After a while the market value of that amount goes down. How much should he pay back to the creditor? The amount that he got as loan or its equivalent in the market value at the time of payment? Does the rule differ if the creditor is non-Muslim?
Answer: He has to pay the same amount that he got as loan; and there is no difference whether the creditor was Muslim or non-Muslim.
Investment
8
Question: Banks in the West give loans —known as mortgage— to those who do not have enough money to buy houses; this is to be paid back in [weekly or monthly] instalments with a high rate of interest. Is a Muslim allowed to use this facility?
If it is not permissible, is there a solution in your view for someone who claims that he needs the mortgage to buy his own residential house and does not possess enough money to pay for it?
Answer: It is permissible to take the money from the bank that is financed by non-Muslim government or private funds but not with the intention of loan. The knowledge that the bank will sooner or later force him to pay the capital as well as the interest does not affect [the lawfulness of] his taking the money.
Mortgage
9
Question: Banks in the West give loans —known as mortgage— to those who do not have enough money to buy houses; this is to be paid back in [weekly or monthly] instalments with a high rate of interest. Is a Muslim allowed to use this facility? If it is not permissible, is there a solution in your view for someone who claims that he needs the mortgage to buy his own residential house and does not possess enough money to pay for it?
Answer: It is permissible to take the money from the bank that is financed by non-Muslim government or private funds but not with the intention of loan. The knowledge that the bank will sooner or later force him to pay the capital as well as the interest does not affect [the lawfulness of] his taking the money.
Loan
10
Question: What is the Islamic law about buying a car on installments? Many auto companies and authorized car selling agencies sell new and used cars on installments. Thus, when customers go to buy those cars, the companies refer them to certain institutions such as banks and insurance companies. The companies get back the capital as well as the interest in monthly installments stretched over a number of months or years. If someone fails to pay his installments on time, the company overcharges the defaulter. The interest rate is determined on the basis of certain important factors such as the client's turnover, amount of income or timely-repayment of installments. The amount of interest generally paid is 4%, 3% or 5% or more or less. What is the Islam law with regard to buying a car on monthly installments keeping in view the foregoing details?
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Answer: If the loan providing companies first buy the cars from the agencies and then sell them to customers on installments with some increase (interest) as part of the prices of the cars, the transaction is in order. Indeed, if a penalty is imposed due to a customer failing to make payment on time, it is forbidden (harām).
And if it means that the companies or agencies themselves sell the cars to customers, and in return the loan providing company gives the price of the cars to their manufacturers or agencies, and receives more money on installments from the customer, it is forbidden.
Buying & Selling
And if it means that the companies or agencies themselves sell the cars to customers, and in return the loan providing company gives the price of the cars to their manufacturers or agencies, and receives more money on installments from the customer, it is forbidden.
