Finance & Business Khilaf (Disputed)

Is Interest (Riba) Haram?

Is bank interest (riba) completely prohibited in Islam?

Islamic Ruling

Interest (riba) is haram by consensus — one of the most explicitly prohibited things in the Quran. Allah declares war on those who deal in riba (Quran 2:279).

What is riba? Any increase stipulated in a loan contract beyond the principal amount. This includes:
- Bank interest on loans and credit cards
- Interest on mortgages
- Predatory lending arrangements

Riba al-fadl (exchange riba): Unequal exchange of the same commodity (e.g., 1kg gold for 1.1kg gold) is also prohibited.

Mortgages: A major contemporary issue. In non-Muslim majority countries, most scholars permit conventional mortgages under *darura* (necessity) when Islamic alternatives are unavailable and renting is not feasible. However, Islamic mortgages (musharaka, murabaha) are the preferred solution.

Savings accounts: Scholars differ on whether accepting small interest from a savings account into which you have no choice but to place your salary counts — many say donate it to charity if you cannot avoid it.

Quranic Evidence

Quran 2:275

Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest.
Quran 2:278-279

O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allah and His Messenger.

Hadith Evidence

Sahih Muslim 1598

"The Prophet ﷺ cursed the one who consumes riba, the one who pays it, the one who writes it down, and the two witnesses to it — they are all equal."

Views of the Four Madhabs

All four madhabs

Unanimous: riba is haram. Differences exist on what constitutes riba al-fadl and contemporary instruments.

Scholar's View

Sheikh Taqi Usmani: "The Islamic economic system is not merely about avoiding interest — it is about replacing exploitation with profit-and-loss sharing."

This ruling is presented for educational purposes based on established scholarly sources. For matters specific to your personal situation, please consult a qualified Islamic scholar (mufti) from your madhab.

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