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Bank loan for project with interest: advisable?

Answered as per Hanafi Fiqh by Darulifta-Deoband.com
We are into real estate business. For the past 5 years we are doing construction of flats and selling them. Now we depend on the market for funding the projects. Now at this point of time we are in need of around Rs.50 lakhs. Our sites would get completed with this amount. We are having trouble raising the money from market. One of the local banks is ready to finance us the amount. I just wanted to know if it would be fine to take money from the bank as it would involve payment of interest to them against the money raised. Kindly answer my question as soon as possible.

بسم الله الرحمن الرحيم

(Fatwa: 996/996/M=1434)

As it is haram to take interest in the same way it is also unlawful to pay interest without a dire need. Hadith curses interest based dealing. In case you take loan from the bank you will have to pay interest thus it is not lawful to take interest based loan, you should avoid it. If you could find interest free loan you should avail it, but if you face some difficulty in halal then you should bear it, it shall cause prosperity and blessings in-shaAllah.

Allah knows Best!

Darul Ifta,
Darul Uloom Deoband

This answer was collected from the official ifta website of Darul Uloom Deoband in India.

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