Why is charging interest forbidden in islam

Analysis found some solid reasons which proved that interest has been really an evil system for the humankind and society as a whole for all times in the history of civilizations. It is, therefore, very important to be aware of the exact stance of Islam on interest first. The paper shows its originality in substance and makes a unique contribution to the literature on systems and ethics. Zakir Hossain, M.

A statistical justification", Humanomics , Vol. Emerald Group Publishing Limited. Report bugs here. Please share your general feedback. You can join in the discussion by joining the community or logging in here.

Given the fact that much of Islam is embedded in charity, it is greedy for a person to charge interest. As mentioned, there are instances in which interest money cannot be avoided, and whilst this is recognised, interest money is still not halal. That being said, the attitude towards interest money will depend on the school of thought you follow. For example, some Muslims take Riba being haram literally, and as such, will not own a home as mortgages are often paid back with interest.

In the same manner, they will not take out loans or have credit cards because of the interest charges on defaulted payments. In contrast, other Muslims will seek to own a home, and many have credit cards and take out loans as a safety net in case of an emergency.

There are ways to obtain an interest-free mortgage and not incur interest on money in a bank account in the UK by banking with an Islamic bank such as the Al Rayan and United Banks. In the instance you do incur interest money inadvertently, there is only one way you can spend it.

For those wondering can you give interest money to charity in Islam, the answer is yes, but only as a general donation. Whilst Zakat is a type of charity, it is not permissible to use interest money for Zakat. In summary, if you have accrued interest money, you may make a general donation with it. If you do not want to make a general donation with it, you may buy essential supplies such as water, food, medical aid kits or clothes for a person in need instead.

Interest money may be donated to charity, but it cannot be spent as Zakat. When Zakat is given, the donor does so out of a religious obligation under the third pillar of Islam. In addition, when Zakat is given, the donor can expect to receive a reward, but a person who gives Riba to charity should do so without intending or expecting to receive a reward sawab.

If you take out a loan from a credit company or a bank, there is a chance that you will be charged interest on it by the lender if you default on your payments.

Whether or not the act of borrowing money through a credit card or loan is haram based on the potential for interest payments depends on the school of thought you follow. It depends on your school of thought. The question of whether a mortgage is haram largely depends on your school of thought. An Islamic mortgage is when the bank buys the property and you pay them back monthly as if you were paying rent, but you are not charged interest.

Eventually, you should have bought the bank out and legally own the home without having paid any interest on the property. As soon as the Riba money is given to charity, it is cleansed and is no longer considered haram. This means it is permissible for a person in need to receive Riba. In addition to donating your interest money to a registered charity, there are other ways you can spend Riba, including giving the money directly to a poor person or buying clothes, food and essential supplies for them.

If you have accrued Riba automatically through your bank, you may donate it to ILM. Your wealth will be cleansed and we will use your interest money to help those most in need.

Donate your Riba to ILM today or contact us to find out more. Our Recent Posts.