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In the Name of God بسم الله

Confused About Interest

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Assallamu Aleykium brothers and sisters.

 

 

Im very confused about the matter intesrest and i hope that some of you may shed some light on the issue.

I have always belived that every form of interest is haram unless its a matter of life and death.

 

I wonder if its haram or halal to take a bankloan and then pay back the loan + interest.

 

This is from Sistani:

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.
 
This is from Khamenei:

Q: Can we borrow money from non-Muslim banks and pay interest?
A: Although the borrower owns the borrowed money, taking a loan, which entails paying interest, is forbidden unless he is compelled to take the loan. Also one can evade doing the forbidden act by making the intention not to pay the interest, then takes the loan even if the interest may be taken from him.

 

 

 

This is the part where im very confused. Both of them say its halal IF you make intetion that you will not pay interest even if you know that you will pay it.

To me this sounds very very strange. How can i make a sincere intention when i know its not the case?? How can i make an intention to not do a haram act if i know that i will do it?

Its like: Im goin to make a intetion not eat pork at dinner even if i know i will consume the meat.

 

 

 

 

 

 

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Ha I knew I was right by taking Student loans without intending to pay them back! B)

No, you "intend" to pay back the principal and not the interest, knowing perfectly well that you are required per contract to pay the interest too. He doesn't say borrow with intention to not pay back at all.

It doesn't really make sense to me, but that's what he says.

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(salam)

 

While I'm no expert, I believe what it suggests that you understand that it is Haraam but, if you really, really, really need it and there are no other avenues, then you can go ahead and take the loan, bearing in mind that you'd rather not pay the interest, much like if you're stuck in a desert with only wine to drink. You don't intend/want to drink it but you have to.

Edited by Khadim uz Zahra
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(salam)

 

While I'm no expert, I believe what it suggests that you understand that it is Haraam but, if you really, really, really need it and there are no other avenues, then you can go ahead and take the loan, bearing in mind that you'd rather not pay the interest, much like if you're stuck in a desert with only wine to drink. You don't intend/want to drink it but you have to.

Well actually... wine would dehydrate you further... =P 

But I understand what you're saying haha =)

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It's like you know you'll be forced to do something however you yourself don't intend to, (but I think with any such intention comes the obligation to at least try for what you've intended, and we all know it's a futile effort to try it with the banks). Maybe you should write to Sistani and Khamenai asking the same thing.


 


An important thing here to understand is also how banks design the structure of monthly installments; it is designed in a way that in the initial months you're mainly paying the interest while in the last few months you're mainly paying principal amount. So let's say I take the loan making an intention that I'll try to pay back the loan in full much earlier than the duration of loan, thereby reducing the amount of interest I pay or saving myself from paying any more interest in the months to come... However, what really happens when you arrange the money to pay back in full to the bank, you find that what you've paid so far was mostly the interest and a great portion of the total interest has already been paid by you while a great portion of the principal amount remains to be paid. So, banks get their interest first and capital later, no way to escape.  :shaytan:


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(salam)

 

While I'm no expert, I believe what it suggests that you understand that it is Haraam but, if you really, really, really need it and there are no other avenues, then you can go ahead and take the loan, bearing in mind that you'd rather not pay the interest, much like if you're stuck in a desert with only wine to drink. You don't intend/want to drink it but you have to.

 

The problem is you don't actually need to take the loan in order to survive or even live a comfortable life.

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(salam)

the real questions you should ask our eminent :Marjas are ;

  1. What is the definition of money in the fatwa , is it referring to the money as defined in the quran or the money we use today ?
  2. what is the definition of a loan, is this the islamic definition or todays definition ? i.e. the islamic defenition of a loan is when you borrow something from someone in order to return it , the banks definition today is not that , but their "Loan" is also referred to as the money that you created through the process of securitising  the loan contract and the bank facilitates this process . In other words this cannot be a loan from an islamic perspective as there was nothing that was loaned as it was created from your signature so you are the owner of the loan and this cannot be deemed as a loan.
  3. what is the difference in a non muslim bank and a muslim bank , as all banks use the same platforms and operate through a riba based system through central banks and the BIS , so are we referring to the major share holding component ?
  4. and finally who is borrowing the money , from the quranic perspective does the fatwa refer to the living being borrowing the money or it's fiction representative which is a corporation acting on behalf of the living being e.g. JOHN SMITH. So does the ruling apply to this entity who is taking the loan ?

(I hope my posts don't get deleted again from the mods )

 

ws

Edited by :Sami II
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The problem is you don't actually need to take the loan in order to survive or even live a comfortable life.

 

What if loan is taken for medical procedures or operation or ransom or some other mishap... such situations exist and I think these are the situations where mujtahideen say it's okay to take interest-based loan; tending to the situation at hand thinking you wont pay interest though in future you may end up paying it.

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^ Or what if a huge loan has to be taken in order to pay off the "lump sum" mehr of a woman who won't take monthly payments and threatens to not sign the divorce papers?

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The problem is you don't actually need to take the loan in order to survive or even live a comfortable life.

 

Well, in most cases, perhaps not and that is why both cases specific the situation as either an "urgent loan" or "if one is compelled", respectively. In some cases, it is necessary. A good example is the one by Sister Hameedah (who is FINALLY a Mod, YAYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY!) Another would be medical bills. What if my daughter is dying and I don't have the money? My son is going to jail and I can't bail him. My business is going to go bankrupt if I don't invest more capital?

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Well, in most cases, perhaps not and that is why both cases specific the situation as either an "urgent loan" or "if one is compelled", respectively. In some cases, it is necessary. A good example is the one by Sister Hameedah (who is FINALLY a Mod, YAYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY!) Another would be medical bills. What if my daughter is dying and I don't have the money? My son is going to jail and I can't bail him. My business is going to go bankrupt if I don't invest more capital?

 

Like most things yes it should be ok to take loan if its matter of life and death. But taking loan for business?? That shouldnt be ok because u cant take haram money to earn halal money. If you business goes bankrupt and you can get an employment and even if it means earning much less money every month then you shouldnt take loan for business.

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No, you "intend" to pay back the principal and not the interest, knowing perfectly well that you are required per contract to pay the interest too. He doesn't say borrow with intention to not pay back at all.

It doesn't really make sense to me, but that's what he says.

What does a transaction without return mean? I am assuming it means taking something without giving anything in return.

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  • 1 month later...
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Hi 

 

I asked the question to Sistanis office and Khameneis office and i got a answer from Khameneis.

 

 

My question:

Hello.

I wonder how it can be halal to take a loan if you know you will pay interest?

 

 

Answer:

 

Salamun `alaykum wa Rahmatullahi wa Barakatuhu

The loan itself (after taking) is correct, i.e. one can own it even if it is ribaa-based. However, in case that it is a ribaa-based loan, taking it is haraam. That said, unless one is so compelled that committing haraam becomes permissible for them. However, in compulsory situation, one can - for escaping committing a haraam act - intend not to give the extra amount even though they would eventually take it from them.
 
 
 
 
From this if i understand correct is that takin loan with interest is haram.
But if ur in compulsory sistuation u can take the loan with interest and avoiding haram if u intend not to pay interest. (But this rule is only if you are in a compulsory situtation). If your not in that situation then u cant take loan with interest and avoid haram with intetion.
 
 
What do you guys think??
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  • 10 months later...
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Bump!

Why unlike the sunnis our rules regarding this isn't clear? There is always this grey area. 

So according to sistani:

http://www.sistani.org/english/qa/01256/

http://www.sistani.org/english/qa/01220/

We can get mortgages and loans from non-muslim banks but we've to change our intentions.

So question is can we get a mortgage loan from a non-muslim bank for a 2nd, 3rd home etc using this same "technique" (trick lol)? Or can we get investment loans for the purpose of investing it into some shares?

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1 hour ago, SlaveOfAllah14 said:

Bump!

Why unlike the sunnis our rules regarding this isn't clear? There is always this grey area. 

So according to sistani:

http://www.sistani.org/english/qa/01256/

http://www.sistani.org/english/qa/01220/

We can get mortgages and loans from non-muslim banks but we've to change our intentions.

So question is can we get a mortgage loan from a non-muslim bank for a 2nd, 3rd home etc using this same "technique" (trick lol)? Or can we get investment loans for the purpose of investing it into some shares?

I think marajas are prudent and responding to the practical needs of our times. There is no banking  (hence no loans,.no finance) without interest. We have interpreted it to mean "service charges" for facilitating transactions instead of seeing it as riba, as in car finance cases. Also because there is room to interpret these loans as different from exorbitant, exploitative personal loans which Islam wanted you protected from.

Sunni rigidity and lack of discrimination for different types of interest based loans have made them totally utopian. 

Edited by Marbles
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  • 10 months later...
  • Advanced Member
On 1/10/2015 at 0:30 AM, m3e30 said:

Im very confused about the matter intesrest and i hope that some of you may shed some light on the issue.

If the bank belongs to an Islamic country and it carries out its transactions according to Islamic rules such as muzarabah or musharakah or ju'alah, the interest which is earned or received based on one of these transactions is halal. But if the Islamic rules are not observed, giving money and taking interest is considered to be riba (usury) which is haram. However, if the bank belongs to a non-Muslim country and money is deposited in it, there is no problem in taking interest from it.  Receiving interest from non-Muslims and their banks is permissible according to all religious authorities.

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Guest Zuljenaan
On 12/11/2016 at 8:18 PM, Jawid Akbari said:

If the bank belongs to an Islamic country and it carries out its transactions according to Islamic rules such as muzarabah or musharakah or ju'alah, the interest which is earned or received based on one of these transactions is halal. But if the Islamic rules are not observed, giving money and taking interest is considered to be riba (usury) which is haram. However, if the bank belongs to a non-Muslim country and money is deposited in it, there is no problem in taking interest from it.  Receiving interest from non-Muslims and their banks is permissible according to all religious authorities.

 

Sir, but what about 'taking loans' from banks belonging to non-Muslim country.  Are we permitted to take loans and pay the interest, and if so, are we allowed to do it only under compelling situations! [you have addressed the issue of  "Receiving interest from non-Muslims and their banks"

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