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In the Name of God بسم الله

Riba confusion

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Do loans from the government really classify as haram riba? I feel like there is a disconnect with people who live in the west and the scholars who do not live in the west, making them(the scholars) not fully understand the nuanced economic system of the western society.

Let’s assume person A takes a $1000 loan from person B with a 10% interest. Person B promises that the 10% interest that is gained, together with person B’s own income, they will use to rebuild the road outside my house, give me free health care, provide free education(not including university, however, you do get ~$400 for studying in university. Rest is loan if you want it) to me and my children etc. Meaning the money is promised and will be circulated back to person A in either case and MORE. How is this the same as the textbook definition of riba, where one person takes the interest and keeps the money for themselves? 

In Sweden for example, the system is built in such a way. However, I’m reading that even student loan(for university education), that has an interest rate of 0.05%, is a major sin?

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Lending (Arabic: قَرْض) is giving property to a person with his commitment to return it to the lender. According to the Qur'an and hadiths, lending is considered among recommended actions and the lender will receive great rewards from God. About the importance of lending, it is mentioned that giving “qard al-hasana” (قرض الحسنة, lit. “good loan”) is considered giving loan to God. It is a type of lending which is from permissible properties and is not spoiled by reminding the favor or harassment. In hadiths, it is also advised to be kind in taking back the loan.

 

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Rulings
In jurisprudence, lending refers to transfer of possession of a property to another, when in return, he undertakes to return it.

For correctness of lending, in addition to general conditions such as maturity, will and volition, there are some specific conditions, such as being specified and possessable as the conditions of the property to be lent (contrary to liquid intoxicants and pigs which are not possessable.) Also, the object of lending should be specified.

 

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Usury in Lending
Usury in lending is when the condition is set that the lender should take back more than what he has given; whether it is explicitly mentioned upon lending or not. But, if such a condition is not set and the borrower willingly gives back more upon paying back, it is not considered usury or forbidden according to Shia and Sunni jurists.

https://en.wikishia.net/view/Lending

https://en.wikishia.net/view/Verse_of_Usury

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Salaamun aleikum,

So the sharia doesnt take inflation into consideration at all?

For example, The 2.11% inflation rate means $1000 in 2010 is equivalent to $1257.98 today. 

I totally get the prohibition of usurious interest, but getting paid back the true current value of your loan seems reasonable, however, im clearly not a marja.

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