Why is interest evil?
Allah says in the Qur’an:
Translation: Those who devour usury will not stand except as stand one whom the Evil one by his touch Hath driven to madness. That is because they say: “Trade is like usury,” but Allah hath permitted trade and forbidden usury. [Surah Baqarah, 2:275]
A few verses later, Allah says:
فَإِن لَّمْ تَفْعَلُواْ فَأْذَنُواْ بِحَرْبٍ مِّنَ اللّهِ وَرَسُولِهِ وَإِن تُبْتُمْ فَلَكُمْ رُؤُوسُ أَمْوَالِكُمْ لاَ تَظْلِمُونَ وَلاَ تُظْلَمُونَ
Translation: O you who believe! Observe your duty to Allah, and give up what remains (due to you) from usury, if you are really believers. And if you do not, then take notice of war from Allah and His Messenger. But if you repent, you shall have your capital (without interest). Deal not unjustly (by asking more than your capital), and you shall not be dealt with unjustly (by receiving less than your capital). [Surah Baqarah, 2:278-279]
Abdullah, who takes a $10,000 loan and then he goes out of business. He now has to pay interest on his loan even though he has lost all the funds. In 5 years he might still be suffering and paying back the loans. At 7% interest, he will end up paying $20,000 in total if he still has the loans in 10 years.
A more fair deal would be that the business person who makes a deal that he will lend brother Ahmed $10,000 loan and he will be a partial owner of the business. If Ahmed makes a huge profit, the business person will also get 25% of it, which will be much more than the measly 7% he could have got as interest, and Allah will bless it as well, whereas Allah has cursed the one who takes interest and pays it.
The international monetary fund (IMF) and World Bank, which gives interest loans to countries – for example Bangladesh might receive an interest loan, and the interest will be so much that they will never be able to pay back the loan. In fact, they may eventually forgive the interest on the loan, or they may not. If they do not, the country sometimes has to sell “cash crops” (goods which cannot be used by the country itself, but can only be sold for money, such as coffee for example – say rather than rice, which can be eaten by the local population) in order to simply maintain the loan. When I say maintain, I mean to keep it at the same amount, and just pay the interest.
Families where the father loses his job and resort to riba, may end up maxing out their credit cards, and may end up paying hundreds of dollars in interest every month. This is equivalent to burning that cash, because, literally, it is wasted. Why do you think the banks are so rich, anyway? Because suckers like me and you fall for the it and upon us as well is the anger of Allah! This large loans at a 18% interest rate become very difficult to pay back. In fact, at the credit card rate, you will end up paying double the amount if you paid the minimum balance and paid it all in 4 years. An example of this is if you bought a laptop for $2000, and you paid off your full credit card in 4 years, you will have spent $4000 on this laptop.
Place your trust in Allah, and ask him to help you find a way out.
If you have student loans, get rid of the entire amount before you graduate, by asking around for interest free loans from your friends and family members (you can do the same thing even if you’re working). Even if you feel bad/embarrassed to ask for money, remember that the interest you took is extremely sinful and that its better for you to ask so that you can get out of it. Also consider part time, summer jobs, or internships.
Often, riba will be translated as usury, no interest. Some times people will claim that interest is halal, but only in excessive amounts does it become usury. This is only their vain desires. Bring your proof if you are truthful. The Prophet (peace and blessings of Allah be upon him) said, “The gold for the gold, the silver for the silver, wheat for wheat, barley for barley, date for date, salt for salt, similar for the like, and hand in hand. So whoever adds or seeks to add, then he has used riba. The recipient and the giver of the transaction are the same.” (Reported by Muslim, #1584)
Once Bilal (رضالله عنه) brought Barni (i.e. a kind of dates) to the Prophet (صلي الله عليه وسلم) and the Prophet (صلي الله عليه وسلم) asked him, “From where have you brought these?” Bilal (رضالله عنه) replied, “I had some inferior type of dates and exchanged two Sas of it for one Sa of Barni dates in order to give it to the Prophet; to eat.” Thereupon the Prophet (صلي الله عليه وسلم) said, “Beware! Beware! This is definitely Riba (usury)! This is definitely Riba (Usury)! Don’t do so, but if you want to buy (a superior kind of dates) sell the inferior dates for money and then buy the superior kind of dates with that money.”
- http://www.islam-qa.com/index.php?ref=824&ln=eng&txt=interest%20riba
- http://www.islam-qa.com/index.php?ref=1507&ln=eng&txt=interest%20riba
- ISNA has interest free loans. (now known as Ansar Housing)
- UM Financial has interest-free loans
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this makes me very scared. I got a credit card to help me pay my rent until I got my first paycheck…low and behold I ran up the card plus they had some credit check thing that took off about $30 a month and that made me go over my limit and on top of that I paid my bill late once….so now I am definitely dealing with interest. I dont’ use it anymore I am just trying to pay it off. I was listening to a lecture The Hereafter lecture by Imam Anwar al Awlaki and he said that on the Day of Judgement the person who dealt with interest will be give weapons and told to fight with Allah, not to mention torture in the grave, and torture and hardship in this life. If i pay it off and never deal with credit cards or interest again and seek forgiveness will I be forgiven or will I still be tortured and will Allah declare war against me? Jak.
Rejoice! Allah is At-Tawwab. He is the one who accepts the repentance of His slaves. Do not grieve for mistake you made in the past, just feel bad for doing it, commit never to make them again, ask forgiveness from others if others were harmed, and continue with your life.
Cut up your credit-card. The best way to avoid interest is to cut up your credit card. Go debit.
Or, alternatively, VISA offers a “debit” credit-card. It appears to be a credit-card, and works at all credit-card-accepting-vendors–but under the hood, it’s really a debit-card.
Wallahu ‘alam.
Jak to both Allah is At-Tawwab and Ilm Seeker.
Allah is At-Tawwab….thanks for the reminder too often I forget about which causes me to distance myself from Allah.
Ilm Seeker…great idea! when i read “cut up your credit card” I was thinking what?! but then i was thinking…If I am going to make a promise with Allah to never deal with interest again I might as well cut it up. I have not used it in months and cutting it is the only way to be sure that I will not slip….i just cut my card, Alhamdulilah!,but as I was looking for the scissors it was either my nafs or shaytan saying “don’t cut the card…what if an emergency comes up and you need it?” May Allah make us and keep us steadfast on the deen.
VISA offers a debit “credit-card.” It’s a debit card (so you pay first–no interest); it’s accepted by any vendor who accepts Visa credit-cards. They don’t have it in Canada, but they do in LOTS of other countries. You can use that, insha’Allah.
TD Bank Visa Debit: http://bank.tdbank.com/personal_banking/checkcard.cfm
Scotia Bank Visa Debit: http://scotiabank.com/gd/cda/content/0,1679,CCDgd_CID2652_LIDen_SID117_YID28,00.html
I do not endorse these in any way or form as halal or haram, please check for yourself.
What is difference between exchaging two low quality dates for one good quality and selling the low quality dates to buy high quality dates? If the high quality dates truly are twice as expensive, there should be no difference.
@Joe, the difference is that Allah has permitted trade, business, buying/selling, bartering; but He has forbidden interest.
Some of the scholars have mentioned that one of the wisdoms is with respect to monopolies–a person who only ever exchanges dates for dates, eventually forms a monopoly of high-quality dates; forcing him to deal with money breaks that, utterly and completely, from happening.
Thanks for your reply.
How is trading dates interest? Isn’t this battering?
@Joe, trading dates is not interest; the word commonly translated as “interest” is “ribaa” (ربى) in Arabic. The most common form of ribaa in our times is interest.
However, to be precise: pretty much all of interest is ribaa, and ribaa contains things other than interest–like trading 2kg of low-quality dates for 1kg of high-quality dates. For more details, take a class on Islamic finance.
Now I’m confused. The hadith says:
“I had some inferior type of dates and exchanged two Sas of it for one Sa of Barni dates in order to give it to the Prophet (PBUH); to eat.”
But you are saying the opposite.
So battering is allowed as long as the traded items are different?
@Joe oops, I mixed up “low” and “high,” my bad.
Bartering is allowed with some restrictions. It depends. Again, as I mentioned, you really need to take an Islamic Finance class if you want to understand.
The case here of dates-for-dates is the same species, same category of items being traded; the two conditions in this transaction is that it’s done hand to hand (in one sitting), and same quantity for same quantity.
This is not the same as trading dates for watermelons, or trading cash for dates. Those transactions have different requirements and conditions on them in order to avoid riba.
If you’re interested, drop me an email at ilmfruits@ilmfruits.com and we can follow up on this discussion in excruiciating detail.
(P.S. the proof for the above is the hadith: gold for gold, silver for silver, dates for dates, …)
Assalam O alikum, Alhamdolilaah Allah Subhanahuwataalahu Has protected me from indulging in interest/usury, I do not own any property I work in a company and i must say that the amount i earn though it looks insufficient but it is adequate and i live the entire month beautifully with honor supporting my entire family. However, i have many Non-Muslim friends and they all have a good salary in comparison with me, but due to their indulgence in riba and usury they are always troubled both financially and health wise. My question is how should i approach them explaining that riba/usury is not good. Please Help!
@Muhammad Fahad, I’m not sure if approaching them about riba/usury is the best approach. The most important thing is tawheed and a solid belief in Allah, and this should be what we call to, as it is what all the anbiyyah called to when Allah gave them the message.
So worry about that first, and insha’Allah riba becomes easy to take care of once that base is established.