Paying over 100% interest (like loan sharks) is not allowed but low interest rates may be allowed because they stimulate economic growth, as is practiced in the modern economies. Ijarah is another approach that is basically a rent-to-own type of transaction. Why is interest haram in Islam? What you have heard about credit cards being haraam is correct. I have mainly been relying on Zoya app to make decisions. Report. 1.9k Shares. Lv 7. An elderly pensioner with modest income and lacking ability to analyse risk should assume little if any risk. How Are Islamic Mortgages Different to Conventional Ones? It is the only reason why we worship. Many Forex / CFD brokers offer Islamic trading accounts which do not charge or pay overnight interest on open positions. If there are no Islamic Banks in your country of residence and you have to deal with conventional banks out of necessity (buying a car or house is not a necessity), seek Allah’s forgiveness for the same and make sure that the interest banks pay on the savings accounts is balanced by giving it away or rather more as charity. I sometimes google and find detailed explanations on why a certain stock is halal or haram. Please give AUTHENTIC HADTHS AND AL HOLY QAURANIC VERSES PLZ! like some people cant afford stuff and they need it and what if you kno you can pay the loan off? Beloved brother, the reason riba (usury, interest, etc.) So let us first try and understand what is Riba and what the Quran says about it. If they really do believe this lie, it is as God has said (Surat al-Baqarah, 2:274): they have been so disoriented by the touch of Satan that evil appears to them as good, and goodness appears to them as foolishness: ‘Those who live on usury shall be raised before God like men whom Satan has maddened by his touch.’”. Ibrahim holds a BA in Philosophy, Politics, and Economics from the University of Oxford, an Alimiyyah degree from the Al Salam Institute, and an MA in Islamic Finance. As can be observed from the above surah and hadith, interest has been declared void in its entirety, with no distinction of it being excessive or reasonable. & This site uses Akismet to reduce spam. Assalamualaykum WaRahmatullahi Wabaraktuh. Why Riba (Interest) Is Haram- ᴴᴰ - Powerful Reminder. Is an Islamic Mortgage Really Right for Me? Bribery is also not allowed. The other person has to return the interest that he took. Your email address will not be published. Browse more videos. Prophet Muhammad (Salallāhu ‘alayhi wasallam) in his Last Sermon, said, “Listen, every amount of interest that was due in Jahiliyya is now declared void for you in its entirety. I think the concept of having the amount of profit you make fluctuate over time is haram not the idea of making money. A few days ago, someone posted here an interesting document aptly titled The Earth Plus 5%, a story illustrating in a simplified manner how the modern interest-based banking system came to be and why it is an unfair system.. To quote the first few lines of the document: I have also heard arguments that concur with this in the following text: Matn Abi Shuja (https://www.amazon.com/Ultimate-Conspectus-Matn-al-Ghayat-al-Taqrib/dp/0985884029/ref=sr_1_fkmr1_1?ie=UTF8&qid=1544802738&sr=8-1-fkmr1&keywords=matn+abi+shuja), The basis for all Islamic finance and halal transactions is that risk must be SHARED; however, given most of the banking system and modern economy of today, risk is often lopsided and on the consumer/average citizen. There are also some misconceptions Muslims generally have about Riba. In addition, due to lack of complete understanding many a times we have our own reasons and justifications to not believe and understand the severity of the issue. You can find all these articles in http://www.ideasfd.org/if-corner.html. Haram Becomes Beautiful - Powerful Reminder. https://www.youtube.com/watch?v=mICixMTW_qs, https://www.amazon.com/Ultimate-Conspectus-Matn-al-Ghayat-al-Taqrib/dp/0985884029/ref=sr_1_fkmr1_1?ie=UTF8&qid=1544802738&sr=8-1-fkmr1&keywords=matn+abi+shuja, https://islamicmarkets.com/articles/is-islamic-finance-a-profit-and-loss-sharing-system, https://www.islamicfinanceguru.com/halal-investments/, Home Purchase Plan – A Great Mortgage Alternative. Like us on FB: https://www.facebook.com/pages/Ink-Of...Official Ink Of Knowledge' Facebook Page. Salam I know I should be asking this question to an Imam but wanted your thoughts Why is interest haram? The point being made here is simply that we don’t ever go to a shop to buy £5 notes to use as cooking stock, or 50p coins to use as a nail file. Interesting arguments and thinking on this article. We have to pay interest on credit cards, but how come its not right to get it? In Islam, the validity of a financial or commercial transaction is not dependent on the financial status of the transacting parties. Government can then spend that money on its programs. I don’t like that – and that, I think, is ultimately why interest is haram.” There are two problems with renting out the “confidence of many others in society”. But why is that? That has already been discussed in question no. 17 votes, 66 comments. Because people wealth is being worth less and cost of living becomes expensive each year, because of interest All discussion I have seen have been around debt, interest, etc. If you agree that there will be a $5 on top of a $50 dollar loan, then that's not haram. Answer for question: Your name: Answers. He was previously a private equity/venture funds lawyer in the City. The root cause of inflation is interest, get your facts right, this is why it’s Haram to do investment with interest. Just as fasting or giving alms is fard because of “divine order”, so too is interest forbidden for the same reason. What does one do in such cases where it is not (prima facie) exploitative? Playing next. If one has renting out a gold coin (somehow back in vogue as a currency let’s say), we wouldn’t want the gold coin for itself, but for what nice things it could buy. Even if you had a nice career it would take lifetime to save up that much money. Keeping money in a low interest bearing accounts could at least mean that the effects of inflation are at least zero. Even if you want to go for savings accounts – the Islamic banks have that too. This is a dangerous and unjust way of getting wealthy. cantspeak. But whatever be the reasons, we ended up being ignorant about the abhorrence of Riba in Islam. This is a much more solid argument and lies at the heart of the Islamic prohibition on interest. FilmMieux. As practicing Muslims we should strive to avoid Riba based transactions in our daily dealings to the maximum extent possible. Save my name, email, and website in this browser for the next time I comment. The value in a £10 note is that which we are willing to give it. Therefore I reword your question as follows: " Whoever says it is allowed to deal with interest that is not usury has the burden to provide the evidence." I guess the primary reasons for the same is lack of proper understanding of the severity of the issue among Muslims. Some people say that an interest-bearing loan can lead to a lot of growth for a business, or can (as the above example outlines) allow one to get onto the housing ladder and pay less money than they would if they were to rent. 6:08. Jazak Allah Khyr. There is no such evidence in the Qur’an and any other evidences need to be understood based on the directive of the Qur’an. Helping Muslims make smart and sharia-compliant decisions on their investments, personal finances and entrepreneurship journeys.