Amount borrowed R42000. Pay R500 per week as “PROFIT”. Time when money to be paid back not set. Can Muslims enter into transactions like this? (R = Rand, South African Currency)
The weekly amount of R500 will be payment towards the loan of R42000. It is
not a profit. It is not permissible to demand or pay anything in excess to
R42000 as that will be interest. Rasulullah (SAW) SAID, every loan that
draws a benefit will be interest and haram.
Was salaam
Mufti Ebrahim Desai
FATWA DEPT