✿ Written by: Saudi Fatwa Committee (Fatāwā)
If a loan is taken from a bank according to Sharīʿah-compliant methods, such as:
Then there is no harm in doing so.
However, if the loan involves interest (riba)—meaning that an additional amount must be paid back over the borrowed amount—then this is absolutely impermissible in Islam.
Allah ﷻ has clearly prohibited riba in the Qur’an, and the Prophet ﷺ has issued stern warnings against it.
Allah ﷻ says:
«ٱلَّذِينَ يَأْكُلُونَ ٱلرِّبَوٰا۟ لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ ٱلَّذِى يَتَخَبَّطُهُ ٱلشَّيْطَـٰنُ مِنَ ٱلْمَسِّ»
(Al-Baqarah: 275)
“Those who consume interest will not stand (on the Day of Judgment) except as one stands who has been beaten by Satan into madness.”
The scholars of tafsīr explain that the one who consumes riba will rise from the grave like a madman.
Allah further states:
«ذَٰلِكَ بِأَنَّهُمْ قَالُوٓا۟ إِنَّمَا ٱلْبَيْعُ مِثْلُ ٱلرِّبَوٰا۟ ۗ وَأَحَلَّ ٱللَّهُ ٱلْبَيْعَ وَحَرَّمَ ٱلرِّبَوٰا۟ ۚ»
(Al-Baqarah: 275)
“That is because they say: Trade is just like interest. But Allah has permitted trade and forbidden interest…”
«فَمَن جَآءَهُۥ مَوْعِظَةٌۭ مِّن رَّبِّهِۦ فَٱنتَهَىٰ فَلَهُۥ مَا سَلَفَ… وَمَنْ عَادَ فَأُو۟لَـٰٓئِكَ أَصْحَـٰبُ ٱلنَّارِ ۖ هُمْ فِيهَا خَـٰلِدُونَ • يَمْحَقُ ٱللَّهُ ٱلرِّبَوٰا۟ وَيُرْبِى ٱلصَّدَقَـٰتِ»
(Al-Baqarah: 275–276)
“Whoever receives admonition from his Lord and stops, he shall keep what is past, and his affair is with Allah. But whoever returns (to riba), such are the dwellers of the Fire—they will abide therein. Allah destroys riba and increases charity.”
The Prophet ﷺ said:
He cursed the one who consumes interest, the one who pays it, the one who records it, and the two witnesses of it, and he said:
“They are all equal (in sin).”
(Ṣaḥīḥ Muslim 1598/106)
There are numerous and well-known verses and ḥadīths that clearly explain the severity of riba and its prohibition.
A person in need does not qualify as being in a state of extreme necessity that would allow riba, similar to consuming carrion (dead meat) in dire hunger. Why?
Only a person whose survival is at risk, who is completely unable to earn, may be considered truly muḍṭarr (compelled). Most of those who engage in riba with banks do not fall under this category.
Unfortunately, riba has become common and treated lightly, and some people even issue fatāwā in its favor over minor doubts. The real reasons behind this are:
① Lack of knowledge
② Weakness of faith
③ Love of wealth
May Allah protect us from all such actions that bring about His anger.
Even when dealing with banks through permissible means, it is still best to avoid them altogether, because:
“Whoever avoids doubtful matters has preserved his religion and honor.”
(Sunan Abī Dāwūd, Ḥadīth no. 3330)
Reference:
Ibn Bāz – Majmūʿ al-Fatāwā wa al-Maqālāt, 19/302
❖ Ruling on Taking Loans from Banks
If a loan is taken from a bank according to Sharīʿah-compliant methods, such as:
- Borrowing an amount and repaying the exact same amount, with no addition, or
- Purchasing an item on deferred payment for a higher price than its cash price
Then there is no harm in doing so.
❖ Prohibition of Interest-Based Loans
However, if the loan involves interest (riba)—meaning that an additional amount must be paid back over the borrowed amount—then this is absolutely impermissible in Islam.
Allah ﷻ has clearly prohibited riba in the Qur’an, and the Prophet ﷺ has issued stern warnings against it.
Allah ﷻ says:
«ٱلَّذِينَ يَأْكُلُونَ ٱلرِّبَوٰا۟ لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ ٱلَّذِى يَتَخَبَّطُهُ ٱلشَّيْطَـٰنُ مِنَ ٱلْمَسِّ»
(Al-Baqarah: 275)
“Those who consume interest will not stand (on the Day of Judgment) except as one stands who has been beaten by Satan into madness.”
The scholars of tafsīr explain that the one who consumes riba will rise from the grave like a madman.
❖ Riba Is Not Like Trade
Allah further states:
«ذَٰلِكَ بِأَنَّهُمْ قَالُوٓا۟ إِنَّمَا ٱلْبَيْعُ مِثْلُ ٱلرِّبَوٰا۟ ۗ وَأَحَلَّ ٱللَّهُ ٱلْبَيْعَ وَحَرَّمَ ٱلرِّبَوٰا۟ ۚ»
(Al-Baqarah: 275)
“That is because they say: Trade is just like interest. But Allah has permitted trade and forbidden interest…”
«فَمَن جَآءَهُۥ مَوْعِظَةٌۭ مِّن رَّبِّهِۦ فَٱنتَهَىٰ فَلَهُۥ مَا سَلَفَ… وَمَنْ عَادَ فَأُو۟لَـٰٓئِكَ أَصْحَـٰبُ ٱلنَّارِ ۖ هُمْ فِيهَا خَـٰلِدُونَ • يَمْحَقُ ٱللَّهُ ٱلرِّبَوٰا۟ وَيُرْبِى ٱلصَّدَقَـٰتِ»
(Al-Baqarah: 275–276)
“Whoever receives admonition from his Lord and stops, he shall keep what is past, and his affair is with Allah. But whoever returns (to riba), such are the dwellers of the Fire—they will abide therein. Allah destroys riba and increases charity.”
❖ Severe Warning from the Prophet ﷺ
The Prophet ﷺ said:
He cursed the one who consumes interest, the one who pays it, the one who records it, and the two witnesses of it, and he said:
“They are all equal (in sin).”
(Ṣaḥīḥ Muslim 1598/106)
There are numerous and well-known verses and ḥadīths that clearly explain the severity of riba and its prohibition.
❖ Misconceptions About Necessity
A person in need does not qualify as being in a state of extreme necessity that would allow riba, similar to consuming carrion (dead meat) in dire hunger. Why?
- A person in need can still work with his own hands
- He can relocate to seek help elsewhere or
- Find someone who is willing to give a loan without interest or sell on deferred payment
Only a person whose survival is at risk, who is completely unable to earn, may be considered truly muḍṭarr (compelled). Most of those who engage in riba with banks do not fall under this category.
❖ Widespread Neglect and Warning
Unfortunately, riba has become common and treated lightly, and some people even issue fatāwā in its favor over minor doubts. The real reasons behind this are:
① Lack of knowledge
② Weakness of faith
③ Love of wealth
May Allah protect us from all such actions that bring about His anger.
❖ Best Practice: Avoid Dealing with Banks Altogether
Even when dealing with banks through permissible means, it is still best to avoid them altogether, because:
- Most bank assets are not free from ḥarām sources
- The Prophet ﷺ said:
“Whoever avoids doubtful matters has preserved his religion and honor.”
(Sunan Abī Dāwūd, Ḥadīth no. 3330)
Reference:
Ibn Bāz – Majmūʿ al-Fatāwā wa al-Maqālāt, 19/302
