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 Post subject: Riba, (interest)
PostPosted: Tue Aug 22, 2006 2:27 pm 
I was told that when i was applying for a student loan that, there was no interest and this interest that was there was only due to inflation rates (which i kinda of understand), but then after i applied for it i found out that it has this and other on top of it.

does anybody know here, if it has or hasn't. and is this exact type of Riba that the Prophet pbuh was warning us against?


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PostPosted: Wed Aug 23, 2006 12:59 pm 
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As-Salamo Alaykom,

The basic concept of Riba is increasing debt with time, so as long as the debt increases because of time then this is a form of Riba. I ask Allah to help you finish your education without these loans and remember:

"… And whosoever fears Allaah and keeps his duty to Him, He will make a way for him to get out (of every difficulty). And He will provide for him from (sources) he could never imagine. And whosoever puts his trust in Allaah, then He will suffice him. Verily, Allaah will accomplish his purpose. Indeed Allaah has set a measure for all things." [al-Talaaq 65:2-3]

Please refer to Paying interest because of inflation is riba

Copy and paste from above:

Question:

I know that taking interest is haraam,but I would like to know what does islaam say about taking interest based on inflation. For example, if you borrow 50 pounds and you want to return the 50 pounds in 5 years time, the value of the 50 pounds that you borrowed would be higher in 5 years time. Therefore you payback the equivalent amount to the 50 pounds that you borrowed. I ask this question because I want to know if it is allowed for me to take out a student loan which has interest based on inflation.

Answer:

Praise be to Allaah.

Firstly:

If you borrow 50 pounds from a person or an institution for a period of five years, you have to pay back this amount in the same currency, even if its value goes down (because of inflation), so long as transactions in this currency are still valid.

We have already explained in Question no. 12541 that paying extra on a loan because of devaluation of the currency is haraam and is regarded as a kind of interest. This is the view of the majority of fuqaha’.

Secondly:

Whoever takes a loan in one currency and agrees to pay back in another, has fallen into riba, because what he has really done is to sell one kind of currency now in return for another currency to be paid later on. This is haraam and is one of the two kinds of riba which is called riba al-nasi’ah.

But the borrower may agree with the lender – at the time of repaying the loan – to hand over the money in a different currency. In the example referred to above, when five years have passed and you have to pay back 50 pounds, you can agree with the lender – on the day of paying back – to give him the equivalent in another currency, such as dollars, but that is subject to the condition that it be at the exchange rate that is current on the day you pay it back.

Thirdly:

With regard to taking a loan with interest based on inflation. We have already stated that paying interest on a loan to make up for inflation is haraam, and that it is a kind of riba. Based on this, it is not permissible for you to take this loan, because the Prophet (peace and blessings of Allaah be upon him) cursed the one who consumes riba, the one who pays it, the one who writes it down and the two who witness it. He said: “They are all the same.” Narrated by Muslim, 1598.

And Allaah knows best.


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 Post subject: jazakallahu khair
PostPosted: Wed Aug 23, 2006 4:04 pm 
WA ACLEYKU SALAAM WA RAHMATULAHI WA BARAKATU!

thank you, i don't think its too late to cancel. so inshallah i will do so.

i will tell others aswell. its seems weird though beacuse everywhere i go there advaticment to get students to get a loan and credit cards. and get huge debts.

by the way credit cards are haraam too right ?


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 Post subject: Re: jazakallahu khair
PostPosted: Thu Aug 24, 2006 2:57 pm 
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Sirad wrote:
by the way credit cards are haraam too right ?


Right for two reasons, first it requires a checking account which is prohibited, the Prophet (peace and blessings of Allaah be upon him) cursed the one who consumes riba, the one who feeds it, the one who writes it down and the two who witness it, and he said: “They are all the same.”

The meaning of the one who feeds it, includes the one who gives the money to be used in usury trades. When you open a checking account your money will be used in usury trades and therefore used in feeding usury and that is haram.

Second credit cards apply usury if you don't pay on time, so even if you know for sure that you will pay on time; this is a usury condition which makes the contract haram.

We don't advise dealing with banks at all. The only permissible thing is to rent a safety deposit box and put your money, jewelry, valuables, etc. there. You could use money orders to pay your bills.

May Allah help us observe His laws and forgive our shortcomings.


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PostPosted: Mon Aug 28, 2006 3:39 pm 
admin wrote:
We don't advise dealing with banks at all. The only permissible thing is to rent a safety deposit box and put your money, jewelry, valuables, etc. there. You could use money orders to pay your bills.

May Allah help us observe His laws and forgive our shortcomings.


A sister advised me that what she does when it comes to banks is that any interest that they add into the account she takes it out and give it to the mosque as sadaqa, as she told me that there is not benefit in her giving it away but there will be a sin on her for keeping it.

is this something that is ok, halaal to practice, as it seems logical to me.


one finial question: i have money but this money was giving to me ( e.g family and student grant) , could i then if i give it as sadaqa get a reward from Allah swt?


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PostPosted: Tue Aug 29, 2006 11:58 am 
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As-Salamo Alaykom,

Scholars say if you have a necessity to put money in the bank then it is better not to take interest even if you are going to donate it. Taking interest is a major sin and you can't donate what is prohibited, Allah does not accept it, so it is better to leave it to the bank and not get involved in taking interest.

I know it is more logical to you the other way, however our religion is based first on Islamic text then our logic, so if our logic contradicts a clear text, we should precede the text over our logic, the text says clearly Riba is a major sin and donating unlawful is not accepted, so we should precede this over our logic of taking Riba (sin) then donating it (which is not accepted). I hope this is clear.

A necessity (Darorah) rarely happens but unfortunately Muslims are unaware of that, they would open a bank account for any need (hajah) not necessity (Darorah)

What is the difference between a need (hajah) and a necessity (Darorah)?

If I am hungry and there is nothing to eat except pork, I shouldn't eat from it because this is only a need not a necessity, however if I am starving and afraid to die if I don't eat then this is a necessity and I should eat a little bit so I don't die (I shouldn't become full), meaning after eating enough to survive, eating any more is a sin because it becomes a need not a necessity.

My example was about pork, however we should realize that Riba (interest) is one of the seven major sins and it is more sinful than eating pork, drinking alcohol and committing adultery but unfortunately many Muslims don't know what a grave sin they are committing, may Allah forgive our shortcomings.

Your last question was about a money that you got. If you got it from a lawful mean then donating it is accepted and may Allah reward you, if it is not from a lawful mean then you shouldn't take it from the first place, however if some how you got stuck with it, then donating it is good but remember not to accept it from the beginning, this is exactly like your fist question of taking interest and donating it, first don't take it, but if you got stuck with it, then donate it.

Please let me know if you have more questions.

I ask Allah to help us follow His straight path and shower us with His Mercy and Forgiveness.


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 Post subject: Fatwa
PostPosted: Sun Oct 01, 2006 6:42 pm 
as-Salaamu 'alaykum,

Some scholars like Ibn Jibreen Hafithullah, Shuaib Hassan and Qardawee (some might not agree with him) have said it's allowed to donate the riba money to mosque etc, but it has no reward in it, it's just to avoid a major sin.

Source: http://web.archive.org/web/20061001223555/http://interesttrust.com/live/fatawa.html

was-Salaam


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PostPosted: Mon Oct 02, 2006 11:33 am 
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Wa Alaykom As-Salam,

I have read the article but it doesn't provide any evidences for accepting interest then donating it. It only gives opinions of some scholars, using plain logic nothing else.

Jazaka Allaho khayran for sharing this information with us.


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