In Islam, interest is regarded as haram, meaning it is prohibited and should be avoided at all costs. While it is quite simple to avoid charging interest (just don’t ask for it), Muslims today are finding it more and more challenging to forgo making interest payments. This is due to the fact that many items, even necessities like loans and credit cards, automatically carry interest charges.
Additionally, it is getting harder to avoid earning interest because many western banks automatically apply interest payments to money held in accounts, causing many Muslims to do so unintentionally.
In this situation, Muslims are left with interest money that they are not allowed to spend on themselves, which raises the question of how they might get rid of it and purify their riches in a halal manner.
Types of Interest
Interest money, often known as riba, is available in two ways:
- Riba al-Nasiyah is the interest that builds up on late payments, as in the case of a loan of £100 from Person A to Person B that is due in 10 months. Person A asks that Person B pay back the initial £100 as well as £10 in interest for the delayed payments as retribution for the payment being stretched out over ten months.
- Riba al-Fadl is interest that is paid in the form of things, materials, or goods, such as when Person A borrows Person B their car with only half a tank of fuel with the understanding that Person B will fill the tank back up to the original level before returning the car.
Why Interest is Haram
You who believe, come! If you are sincere believers, fear Allah and give up anything that is still owed to you that may be of interest. (Qur’an 2:278)
Interest money is seen as haram for a number of reasons, the main one being that it is exploitative. When someone borrows anything from another person, it’s usually because they need it. As a result, if they can’t afford to borrow something in the first place, they (theoretically) can’t afford to pay back even more than they’ve already borrowed. When someone in a position of privilege charges interest, they frequently make money off of someone who is less fortunate, and this is wrong.
Islam has a strong emphasis on generosity, therefore charging interest would be ungrateful.
Is Interest Ever Halal?
As was already established, there are some situations where interest money cannot be avoided; yet, interest money is still not halal. In light of this, your attitude towards interest-bearing debt will vary depending on the philosophical school you subscribe to.
For instance, some Muslims interpret the word “haram” literally and will not own a home because mortgages are frequently repaid with interest. They also won’t use credit cards or take out loans because of the interest fees associated with missed payments.
While many Muslims use credit cards and take out loans as a backup plan in case of an emergency, other Muslims will strive to acquire a home.
Banking with an Islamic bank, such as the Al Rayan and United Banks, is one option to get an interest-free mortgage and avoid paying interest on money in a bank account in the UK.
What Can Interest Money be Spent on?
If you unintentionally accrue interest, there is just one thing you can do with the money. The answer to the question of whether it is permissible to donate interest money to charities in Islam is yes, but only as a general donation. Although Zakat is a form of charity, using interest-bearing funds for Zakat is not permitted. This is due to the fact that a person is rewarded for their charity when they donate Zakat, but there are no benefits to be expected when interest money is used because it is haram by nature and should only be used to purify one’s riches.
In conclusion, if you have money from accumulated interest, you might donate it to a universal cause. You can use it to purchase necessities such as food, water, first aid kits, or clothing for a person in need if you don’t wish to make a general gift.
A mosque cannot be built or a Qur’an purchased with interest-bearing funds.
Can You Receive Interest Money?
In the same way that asking for interest is prohibited, so is receiving it unless it is done so through charitable giving. For instance, since the money has been cleansed, a person in need who receives assistance in the form of interest money won’t face punishment for it.
Donate Your Interest Money
If you have interest-bearing funds and wish to use them for make a donation .Please think about giving it to Orphans in Need to help someone in need. Your gift will be gratefully accepted and go towards helping someone in need.
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