Taking a Loan to Repay Debts
Fatwa No: 84809

Question

We know Riba (interest) is Haram and is a major sin. What is the ruling for a bankrupt person to take a loan with interest if there is no other way to pay back his debts? He has loans as debts whose interest keeps on multiplying. Can he take this loan with interest to pay all this back or else what should he do?

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.

Riba (interest or usury) is forbidden and it is among the greatest sins one can commit. There is no difference in this ruling between the person who takes Riba loans to pay back some other loans and the person who takes Riba for other purposes. In fact, the one who takes Riba loans to pay back other loans puts yet another burden on himself as it makes the matter more complicated, the solution more remote and the person becomes more indebted.

Now, you should do your best to pay back these loans and limit your expenditure to the minimum necessary until you reach this objective. Similarly, those who gave you loans should be patient with you until you are able to repay them or that they should forgive these loans for you as an act of in charity (Sadaqah). Allah Says (what means): {And if the debtor is in a hard time (has no money), then grant him time till it is easy for him to repay, but if you remit it by way of charity, that is better for you if you did but know.} [Quran 2: 280]

We advise you also to supplicate Allah with the Du’a that is reported from the Prophet  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) which reads: “O! Allah Make what is lawful Sufficient for me as to keep me away from indulging what is unlawful and make me satisfied with your kindness and not with what others have.” For more benefit, please refer to Fatwa 90514.

Allah knows best.

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