No Harm in Spending the Interest on Poor and Needy Relatives and the Indebted amongst Them
20-10-2020 | IslamWeb
Question:
can I give the money that I earned from bank interest to my relative who has a burden of loan?
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 
is His slave and Messenger.
No Harm in Spending Interest Money on Poor, Needy and Indebted Relatives First of all, if that deposit was made in a Riba-based bank, then you should know that it is impermissible to deposit money, willingly and in the absence of a valid necessity, in such banks in the first place. That is because the prohibition of Riba is unanimously agreed upon, and Allah, The Exalted, warned against it and threatened those who deal in it with waging war against them. He Says (what means): {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. But if you repent, you may have your principal – [thus] you do no wrong, nor are you wronged.} [Quran 2:278-279] However, if someone deposited money in such Riba-based banks for a necessity or due to his ignorance (of the prohibition in this regard) and heedlessness and then repented to Allah, The Exalted, it is incumbent on him to dispose of the Riba money (interest) generated from the deposited funds. He should withdraw this interest money and not leave it to the bank. He should spend it in Muslims’ public interests, which include spending it on the poor and needy. There is nothing wrong with giving it to his poor and needy relatives as long as they are not among those whom he is obliged to provide for as per the Sharee‘ah. It is also permissible for him to give that interest money to the debtors among the people whom he is obliged to spend on if they are indebted because he is not Islamically obligated to pay off their debts, so it is permissible for him to give this interest money to them as, by doing so, he is not waving off an obligatory spending on them. Therefore, if your relative owes debts to people, then it is permissible for you to give him this interest money to spend it in paying off his debts.
Allah Knows best.