Answered by: Maulana Mohammed Kamran Abid
Question
Salam. Is it halal if I ask someone for a loan and offer to pay them back 10% extra as an incentive? This would be straightforward riba, right?
بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
Waalaykumus Salaam. Allah says in the Quran, “Allah has permitted trade and forbidden usury.”[1]
There is a principle in Islamic jurisprudence that any loan which has a benefit is not permissible. Therefore, it would not permissible to ask someone for a loan and offer to pay them 10% extra because the extra amount would be considered riba.[2]
Only Allah knows best
Written by Maulana Mohammed Kamran Abid
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham