Is it permissible to send our children to an Islamic school that was built with a riba-based loan?

Should Muslims send their children to an Islamic school where it was built with a loan involving riba (interest)from a bank? It is the only Islamic school in the city so there is no Islamic alternative. By the way, that Islamic school has quite a bit of trouble and has not run smoothly since it opened, probably due to the riba.

Praise be to Allaah.

Allah, may He be exalted, has enjoined parents to take care of their children, both male and female. Taking care of them is not only limited to giving them food and drink, and clothing them; rather there are things that are more important than that and more deserving of the parents’ attention and concern. What we mean by that is bringing children up with Islamic attitudes and love of the faith; teaching them beneficial Islamic knowledge; making sure that they are adhering to Islamic duties, foremost among which is the prayer; and making sure they avoid bad friends and bad attitudes.  Continue reading

Should he help his father to fill out a form to reduce interest payments?

5 years ago my parents decided to buy an apartment by taking a riba based loan. I have tried very hard to tell them that this is haram and it can have grave consequences. I have tried more than once, but they decided not to listen to me so they bought an apartment witha riba based loan. Now my fathers finacial situation became bad, and he cannot afford to pay the full payment, so the bank gave him an option, to apply for “Loan modification” which is supposedly supposed to help him lower the payment. Since they don’t speak english that well they have asked me to fill this application out, which is not a loan contract, because they already have that, this is supposed to lower their payment, by putting basic infortmation, such as how much he makes, does he live in this apartment or is he renting , etc. So can I Help them fill this out (translate for them) so that their riba baased loan will be reduced?.

Praise be to Allaah.

It is haraam to take out a riba-based loan to buy a house or anything else. You did well to refuse to do that and advise your parents accordingly.

The one who takes out a riba-based loan should pay back the original money, but he is not obliged to pay the interest unless he is compelled to do so. It is permitted for him to use trickery to avoid it.  Continue reading

Ruling on cards issued by Islamic banks which allow one to borrow without interest

What is the ruling on the cards which are issued by Islamic banks, whereby the one who wants them pays subscription fees, then he can borrow from the bank without paying interest? Is the cost of subscription regarded as interest? Please note that if the customer does not borrow from the bank during that period, he will not get the price of subscription back.

Praise be to Allaah.

It is not possible to pass a ruling on any of these cards without examining them properly and finding out the system followed.

In general, there are two issues contrary to sharee’ah which the card must be free of:

1.     Where the subscription fee is greater than the actual expenses incurred by the bank in issuing this card, because this additional amount in return for the loan is riba.

2.     Where the bank imposes a penalty in the event of late payment. This is undoubtedly riba, whether the bank benefits from the penalty or donates it to the poor and the like.

Please see the answer to question 101947, in which it refers to the presence of these two objectionable matters in cards which it is are sharee’ah compliant.

This is what confirms the importance of checking every card before passing judgement concerning it, and not being deceived by the fact that it is issued by an Islamic bank or with the approval of the sharee’ah committee.

And Allaah knows best. Continue reading

Ruling on making programs that banks can use in giving riba-based loans

I have a project for making electronic programs which transmit information on riba-based loans between banks, so that they can find out about the loans that a person has taken out before giving him a riba-based loan. But this program does other things besides that. Is this permissible?.

Praise be to Allaah.

If this program can be used by the riba-based banks to get information about those to whom they are going to give riba-based loans, then it is not permissible to sell it to them, or to work on it, because that is helping in sin and transgression, and Allaah, may He be exalted, says (interpretation of the meaning):

“Help you one another in Al‑Birr and At‑Taqwa (virtue, righteousness and piety); but do not help one another in sin and transgression. And fear Allaah. Verily, Allaah is Severe in punishment”

[al-Maa’idah 5:2]  Continue reading

He bought shares by means of a riba-based loan; what should he do?

I bought shares in the stock exchange by means of a riba-based loan and using credit cards, and from my salary, and I have repented to Allaah. 
How can I make the shares halaal? 
Please note that I owe loans and credit card payments to the bank. 
Is it permissible to sell the shares that I bought from the stock exchange and get rid of some of the loans and the rest from my salary? Or should I pay what I owe on the loan and credit cards via an Islamic bank?.

Praise be to Allaah.

Firstly:

It is not permissible to take loans on the basis of riba, whether to buy shares or anything else, because riba is haraam and abhorrent and reprehensible, and is a major sin.

Allaah says (interpretation of the meaning):

“O you who believe! Fear Allaah and give up what remains (due to you) from Ribaa (from now onward) if you are (really) believers.

279. And if you do not do it, then take a notice of war from Allaah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums)”

[al-Baqarah 2:278-279]  Continue reading

Buying items by instalments from Sab Amanah

What is your opinion on the system of buying by instalments from Sab Amanah, which is as follows according to my understanding: 
If you want to buy an item from stores that specialise in electronics, you pay 10% of the value to the seller, which is the store that specialises in electronics and not the bank, and for the balance, the bank takes instalments from you and deducts them from your salary, and charges interest or some profit margin during that period, whether it is a little or a lot?.

Praise be to Allaah.

It is not permissible to buy goods through the system mentioned, because the bank stipulates a penalty in the event of late payment. That is stated clearly in the adverts for this system on the bank’s website on the Internet, which says:

To avoid a penalty for late payment, it is essential to pay on the due date.  Continue reading

Transferring money to the supplier in a foreign currency via the bank

I import and export some goods. With regard to exchange, when we want to exchange local currency for foreign currency, 
We contact the bank agent to find us the cheapest rate of exchange, then when we agree to it, he transfers our money through the bank to the seller of the goods abroad in the chosen currency, in such a way that we do not take possession of the money ourselves, rather it is only papers or a phone call. Is this permissible?.

Praise be to Allaah.

Exchanging local currency via the bank to foreign currency that will be received by the exporting company in its own country is selling currency for currency, and it is permissible if the exchange between you and the transferring bank is completed in the same sitting in which the agreement is made. The exchange may be done by taking possession of the money itself or by taking possession of the cheque or transfer papers.  Continue reading

He mortgaged his house with the bank, in order to take out a loan

My parents made the mistake of getting into a mortgage house awhile back and we have definately seen the effects of that sin. After making countless dua to Allah for my parents and asking to forgive us and trying my best to please Allah (swt)Alhamdulillah my parents decided to sell the house and move into a rent and not deal with riba. And because of that the house was sold in 1 day and made things soo easy. At first I was shocked because it wasnt like that before when they wanted to sell the house. Then I realized that with the right intention Allah makes things easy.Alhamdulillah. Im not sure how the banking or mortgage thing works but they had to pay the interest first monthly for number of years then when they finished that they started paying for the house monthly.Now the price of the house has increased from the time they had bought it and when they sold the house they made some profit because of that. My question is..is it ok for them to use/benefit from that profit made, like pay off other debts, invest it in a business etc?.

Praise be to Allaah.

There is no sin in the act of using a house or other wealth or property as surety for a loan, in and of itself. Such a pledge is in fact merely giving a guarantee for the debt, so as to assure the lender that he will get his rights from that pledge, if the borrower does not pay off the debt in time or does not pay it in full.  Continue reading

Her father put money in the bank for her and gives her the interest as a gift

My father has deposited a fixed amount in the bank by my name.The riba(bank profit) that he gets on it,he gives it to me as a gift.Can you please tell me whether the money is halal for me and whether I can use it or not.Can you also recommend where should I spend the money?.

Praise be to Allaah.

It is not permissible to put money in the riba-based bank unless it is necessary to protect it and there is no Islamic bank. In that case, it should be restricted to putting it in a current account with no interest from the bank.

The one who deals with riba knowing that it is haraam has to get rid of the interest by giving to the poor and needy, or spending it on the public interests of the Muslims, such as schools, hospitals and so on. It is not permissible for the person to benefit from interest himself.

With regard to the money asked about here, if it was deposited in your name and thus becomes your property and you can dispose of it, you have to get rid of the interest and advise your father to repent from riba and to give it up; you also have to try to take the money out of the riba-based bank.  Continue reading