Paying interest with interest is generally considered haram (forbidden) in Islam, as both paying and receiving interest (riba) are strictly prohibited. Using interest earned from a bank account to pay off interest debt does not make the transaction permissible, as the funds are still considered forbidden and should be disposed of via charity.
Islamic law allows for alternative forms and techniques of financing with a moderate rate of return. It simply prohibits the receipt or payment of interest as a means of determining that return or profit. Therefore, while Muslims cannot pay or earn interest, they can pay and earn a profit.
Riba is mentioned and condemned in several different verses in the Qur'an (3:130, 4:161, 30:39, and the commonly referenced 2:275-2:280). It is also mentioned in many hadith (reports of the life of Muhammad). While Muslims agree that riba is prohibited, not all agree on what precisely it is (its definition).
ikewise it is prohibited to charge any form of interest regardless of whether one party agrees or both agree. A fatwa from Shaikh Salih Al-Munajjid also outlines this by saying, “Mutual consent to commit haram doesn't make it Halal. So accepting interest doesn't make it permissible.
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.
Islam forbids both receiving and paying interest (riba). Many of us can end up accumulating interest through our bank accounts even if we don't want it, so what should we do with it? Since it is not permissible to use riba for one's own benefit, we should donate it to charity.
Paying interest is otherwise known as Riba, and this is considered a major sin. The principle of paying or charging interest goes against Islamic law, which forbids Muslims from lending or receiving money with the expectation of benefiting.
An example of this is the hadith that claims consuming a dirham of interest is worse than committing zina 33 times.
Bible. The Old Testament "condemns the practice of charging interest on a poor person because a loan should be an act of compassion and taking care of one's neighbor"; it teaches that "making a profit off a loan from a poor person is exploiting that person (Exodus 22:25–27)."
The 7 major sins in Islam, often called the "seven great destructive sins," are derived from a Hadith and include: associating partners with Allah (Shirk), practicing magic, unjustly killing a soul, consuming usury (riba), eating an orphan's wealth, fleeing from battle, and slandering chaste, believing women. Avoiding these sins requires sincere repentance and turning to Allah.
Interest is exploitative (Argument 1)
Standardly, the argument against interest is that it is exploitative. A rich person is one who has lots of money, and he is in a position to lend. A poor person has little money and is in need of a loan.
Allah (SWT) tells us in the Holy Qur'an to not engage in interest-based transactions/investments: O you who believe! Fear Allah and give up what remains [due to you] of interest, if you are true believers.
Riba, in Islam is more than just interest. It includes: ✅ Interest on money loans (like interest from banks)- Riba of Debts. ✅ Unequal exchanges (1 kg of gold for 2 kg of gold or a 1,000 Naira new note for 1,200 Naira worth of old notes)- Riba of Sales and much more.
Under Islamic law, yes traditional mortgages are seen as Haram. This is because they charge interest, which is making money from money, a practice forbidden in Sharia law. 'Islamic mortgages' despite the name, are actually home purchase plans, so provide a halal mortgage option.
Usury is interest that a lender charges a borrower at a rate above the lawful ceiling on such charges; a contract upon the loan of money with an illegally high interest rate as a condition of the loan. Usury is also the act of making a loan at such an interest rate; making a loan at a usurious rate.
Islamic analysis
The sharia does not look at the form of the agreement, it looks at the substance. You can call something profit, but if it is “interest”, then the sharia says it is haram.
There's no single #1 worst sin; it depends on the religious or moral framework, but pride is often called the root of all evil (Christianity/Islam), while the blasphemy against the Holy Spirit (unforgivable sin) is considered the gravest in the Bible. Other severe sins include child abuse (Catholicism) and sins that "cry to Heaven" (like shedding innocent blood or oppressing the poor).
Cal. Const., Art. XV, Section 1. California Civil Code Section 1916.1 specifically codifies this exemption to the Usury Law. The reason that this exemption exists is to increase the availability of non-consumer loans.
The Talmud dwells on Ezekiel's condemnation of charging interest. The Torah and Talmud encourage lending money without interest. But the halakha (Jewish law) that prescribes interest-free loans applies to loans made to other Jews, however not exclusively.
Technically, Zina refers to sexual intercourse. However, the steps leading to Zina have also been called Zina in a hadeeth. So, these steps like looking, touching, communicating and so on are haram, and should be avoided.
Yes, Riba is considered worse than zina (fornication/adultery) in Islam because it is explicitly declared a war against Allah and His Messenger, and its consequences are severe both in this life and the Hereafter.
No doubt that Zina (fornication) is a major sin in Islam and one should keep oneself far away from such sin. However, forgiveness from the Almighty for such a sin is definitely possible, if one sincerely repents by regretting what they have done, and making a firm resolution to never return to such a sin in the future.
For the most part, Christians have concluded that interest is not inherently prohibited in modern societies, but that lending practices— including interest rates and collateral—must not take advantage of vulnerable people or make people destitute.
How Can You Avoid Riba?
Halal Investment Guidelines
Islamic principles require that investors share in profit and loss, that they receive no interest (riba), and that they do not invest in a business that is prohibited by Islamic law, or sharia.