Authored by: Al-Sheikh Mubashir Ahmad Rabbani (Hafizahullah)
"If you repent, then you may have your principal amount; do not wrong others, and you will not be wronged."
[Surah Al-Baqarah: 279]
It is narrated by Sulaiman bin Umar (RA) from his father that during the Farewell Pilgrimage, the Prophet Muhammad ﷺ said:
"Behold! All forms of interest from the pre-Islamic era are abolished. If you repent, you may take back your principal amount without causing or suffering injustice."
[Sunan Abi Dawood, Kitab al-Buyoo, Hadith 3334]
From these evidences, it is clear that any interest amount that has not been collected yet should not be taken. Only the principal amount should be recovered. If the debtor is financially strained, they should be given an extension or, if possible, forgiven, as it is a virtuous act.
Allah ﷻ states:
"And if the debtor is in difficulty, grant him time until it is easy for him to repay. But if you forgive it as charity, it is better for you, if you only knew."
[Surah Al-Baqarah: 280]
Similarly, the debtor should return only the principal amount and not pay any additional interest. In Islam, neither receiving nor giving interest is permissible. Unfortunately, many Muslim governments continue to collect wealth from people to pay interest, which is a violation of Islamic teachings. Mutual consent cannot make a haram act permissible, just as mutual consent cannot legitimize actions like adultery or homosexuality. Interest is no different in this regard.
"Leave what remains of interest if you are truly believers."
[Surah Al-Baqarah: 278]
In this verse, Allah commands abandoning future interest but does not require returning previously earned interest.
[Surah Al-Baqarah: 286]
In this case, the person may give it away in charity without any intention of earning reward or gaining closeness to Allah, as rewards cannot be earned through haram wealth. The intention should solely be to rid themselves of the haram wealth.
The Prophet Muhammad ﷺ said:
"Allah is Pure and only accepts that which is pure."
Question:
If a person was involved in interest-based transactions and later repented, what should be done with the interest-based wealth accumulated?Answer:
In this matter, there are two scenarios to consider:① First Scenario: Uncollected Interest Due from Debtors
If a person has repented but still has a significant amount of unpaid interest that is due from others, then they should follow the instruction of the Qur'an:"If you repent, then you may have your principal amount; do not wrong others, and you will not be wronged."
[Surah Al-Baqarah: 279]
It is narrated by Sulaiman bin Umar (RA) from his father that during the Farewell Pilgrimage, the Prophet Muhammad ﷺ said:
"Behold! All forms of interest from the pre-Islamic era are abolished. If you repent, you may take back your principal amount without causing or suffering injustice."
[Sunan Abi Dawood, Kitab al-Buyoo, Hadith 3334]
From these evidences, it is clear that any interest amount that has not been collected yet should not be taken. Only the principal amount should be recovered. If the debtor is financially strained, they should be given an extension or, if possible, forgiven, as it is a virtuous act.
Allah ﷻ states:
"And if the debtor is in difficulty, grant him time until it is easy for him to repay. But if you forgive it as charity, it is better for you, if you only knew."
[Surah Al-Baqarah: 280]
Similarly, the debtor should return only the principal amount and not pay any additional interest. In Islam, neither receiving nor giving interest is permissible. Unfortunately, many Muslim governments continue to collect wealth from people to pay interest, which is a violation of Islamic teachings. Mutual consent cannot make a haram act permissible, just as mutual consent cannot legitimize actions like adultery or homosexuality. Interest is no different in this regard.
② Second Scenario: Accumulated Interest Already in Possession
If a person already has a substantial amount of interest-based wealth in their possession after repenting, what should be done with it? Shaykh al-Islam Ibn Taymiyyah provided a general principle in this matter. The summary of his ruling is:- If the person was aware that the transaction was haram and still proceeded due to mutual consent or personal benefit, then they are considered a usurper (ghasib). Such a person is not entitled to ownership of this wealth, and the wealth should be returned to its rightful owners.
- However, if the person was unaware or believed the transaction was permissible due to misinterpretation or legal rulings (e.g., non-Muslims dealing in alcohol, pork, or interest-based transactions), then the wealth accumulated before their awareness or conversion can be treated as their lawful property.
"Leave what remains of interest if you are truly believers."
[Surah Al-Baqarah: 278]
In this verse, Allah commands abandoning future interest but does not require returning previously earned interest.
Practical Solution:
If a person knowingly engaged in interest-based transactions and later repented, but the wealth is still in their possession, they must:- Return the wealth to the rightful owners if possible.
- If returning it is not feasible, they should follow the verse:
[Surah Al-Baqarah: 286]
In this case, the person may give it away in charity without any intention of earning reward or gaining closeness to Allah, as rewards cannot be earned through haram wealth. The intention should solely be to rid themselves of the haram wealth.
The Prophet Muhammad ﷺ said:
"Allah is Pure and only accepts that which is pure."
Important Note:
This does not mean that a person can intentionally engage in interest-based transactions with the plan of giving the profits to charity later. Such an approach is not allowed. Repentance means abandoning the sin and rectifying past actions.Conclusion:
- Uncollected interest should not be taken—only the principal amount should be recovered.
- Accumulated interest should be returned to the original owners or given to charity without seeking any reward.
- Sincere repentance and a commitment to avoiding interest-based transactions in the future are essential.