Bankrupt and Wants to Borrow a Riba-Based Loan
Fatwa No: 405595

Question

Assalamualaikum syekh.
I was bankrupt and could not pay off my debt to the bank. I don't have anything to sell to pay off my debt. Which is better, whether to borrow from another bank with a lower interest rate or leave my debt until I can pay it off?
Thank you.

Answer

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

As long as the loan will be paid back with a conditional interest in the contract – whether it is a little amount or a large amount – it is not permissible to borrow it unless in case of necessity. Your inability to repay your (initial) loan because you are financially incapable, is not a necessity that permits you to borrow money with Riba.

For more benefit on borrowing money with Riba, please refer to Fataawa 136065, 404938, 100833 and 379279.

Allah Knows best.

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