Taking a loan from a bank
Question:
Assalaamu Alaikum,
I would like to know if someone is in serious need of a vehicle and the only means of acquiring this vehicle is through a loan from the bank if this could ever be compulsory. Well not compulsory but if they can go through this course.
Jazaakallaah
Answer:
Wa Alaikum as salaam,
Taking a loan from the bank is in reality ‘taking a loan with the intention to pay interest’ and this is totally haram in Islam. In this regard, Jabir (RA) narrates that the Prophet (SAS) has cursed the taker of interest, the giver, the scribes and the witnesses, and has said that they are all equal in sin. (Abu Dawood, Tirmizi, Muslim, Ibn Majah).
It is therefore compulsory upon every Muslim to refrain from taking interest and also paying interest. However, in cases where a person is forced by severe needs to borrow from the bank in order to remove extreme cases of difficulties, then the Shariah scholars have given an allowance to the extent of one’s dire needs to borrow only that amount, even if it may require one to pay interest. (Al Ashba wa Nadh’air pg. 115). This allowance is connected to the state when a person is certain that he really has a severe need, which forces him to take the loan. If there is no severe need, and a person can ‘get-by’ (carry-on) without taking a loan from the bank, then it remains Haram for him to do so. Hence, in your case if there is a dire need/necessity, and there is no other way of getting a vehicle through loans from other Muslims or family members, then it will be allowed to go through the bank to get this dire need fulfilled. This however, will be allowed to the extent of your need. This means that if your need can be fulfilled by purchasing a car for the amount of $30,000.00 which is in a good working condition then it will not be allowed to borrow more money than this.
The other thing you should know is that this allowance does not make this act of borrowing and paying interest, halal. It remains haram, however, an allowance has been given by the shariah scholars to do this only in a case where one has to fulfill a dire need or necessity and there is absolutely no other alternative, and a person must achieve the item in order to save himself or his family members from severe difficulties and hardships. Hence, while in this transaction, a person must make every effort to pay out the loan as fast as possible and come out from this interest based transaction. At the same time, he must continue to ask Allah for forgiveness. (Kitabul Fatawa vol.5 pg. 319,320)
And Allah knows best,
Mufti Waseem Khan.