Loan in the eyes of Islam. Debt is a necessary transaction of the people as well as society. Every person living in the society has to face borrowing or lending at some point in his life. However, this beautiful human rule and this Islamic tradition of cooperating with others is often the cause of enmity, strife, and even enmity. And many have used this debt system as a way to raise capital and have become capitalists in the world. And the poor are being crushed in debt because they are dependent on them. In this article, we will try to know something about the rules of debt in Islam, InshaAllah. So that we can know the correct provisions of the loan and be safe from the incorrect provisions. Wama Tawfiqi Illa Billah.
Meaning of loan: The Arabic word for the loan is ‘kajr’ , which is commonly known as loan in Bengali. Its Bengali synonyms are Dena, Dhar, Hawlad, etc.
Debt in Shari’ah terms: To give goods to another, so that he may benefit from them, and then to return the goods or similar to the giver. [Encyclopedia of Fiqh, Volume 33, Page 111]
The validity of loan: The practice of loan is valid, which is proved by circumcision and ijma (consensus). [Mughni, Ibn Kudamah, 6/429]
Narrated Abu Huraira: A man demanded his debts from Allah’s Messenger (ﷺ) in such a rude manner that the companions of the Prophet intended to harm him, but the Prophet (ﷺ) said, “Leave him, no doubt, for he (the creditor) has the right to demand it (harshly). Buy a camel and give it to him.” They said, “The camel that is available is older than the camel he demands. “The Prophet (ﷺ) said, “Buy it and give it to him, for the best among you are those who repay their debts handsomely. ” [Bukhari, No. 2390]
Debt Consolidation Loans What Are Debt Consolidation Loans? Fukahad disagrees on this point. However, the reliable opinion is that every item that is legal to sell is also legal to lend. [Yadul Mustaqbana ‘, Hijawi / 212]
Virtues of lending: Lending is a virtuous act through which the servant attains the pleasure of Allah. It helps people, is kind to them and in many cases alleviates or solves their problems.
The Prophet (peace and blessings of Allaah be upon him ) said: “ Whoever removes the worldly danger of a Muslim, Allaah will remove his danger in the Hereafter. And whoever relieves the affliction of the needy, Allah will ease his affliction in this world and in the Hereafter. Allah helps the servant as long as the servant helps his brother. [Muslim, Chapter: Zikr, Dua, Tawbah, and Istighfar]
The Prophet (peace and blessings of Allaah be upon him) also said: “ Whoever lends money to a Muslim twice is like giving alms once. [Ibn Majah, Sutra Hasan, Irwaul Galil No. 1389]
Debt Setting on Loan Transactions: The question is, can the lender and the borrower set a fixed term at the time of the transaction? Being right, can set the term and also extend the term if necessary. Because
Thereafter, if the term is fixed, the lender cannot claim to repay the loan from the borrower before the stipulated time. Rather he is compelled to wait until the appointed period. Because the Prophet (peace and blessings of Allaah be upon him) said: “ Muslims are determined to meet the conditions. ” [Ahmad, Abu Dawood, Tirmidhi]
Achieving profit through debt: The purpose of debt in Islam is to help people, to be kind to them and to help them in their livelihood, not to gain benefits under the guise of cooperation. That being said, the purpose of the loan will be spiritual growth, not outward growth. And that is the attainment of Allah’s pleasure. For this reason, the borrower is ordered to repay what he has taken at the time of repaying the loan or similar, not excess. If the lender takes the excess or the borrower pays the excess, it will be treated as interest. Because it is mentioned in the jurisprudential principles, ‘Kullu karyin rajara nafan fahua riba.’ That is, every loan, through which profit is earned, is interest.
It is revealed that the above principle of jurisprudence is weak as a hadith. See Irwaul Galil, Albani, No. 1397. However, Qaeda is recognized as fiqhiyah (principles of fiqh).
Example of profit through loan:
A) Lending one thousand dollars to someone and taking more time to repay. It is clear.
B) Lending to a responsible person for the purpose or on the condition that the borrower will employ or co-operate with the lender or any of his family members.
C) Lending to someone for the purpose of renting a house or shop or something like that, which is common in most of society .
Good loan repayment system in Islam and the current banking system, dispelling a doubt: Islam offers a good example in repaying loans as it recognizes lending as helping people and relieving their suffering. So the borrower can pay more or better at the time of repaying the loan, which is called ‘husnul qaya’ or good repayment in Shariah terms. Meaning, narrated from Abu Rafi, he said: “ Once the Prophet (peace be upon him) borrowed a camel from a man. After that, the white camel was actually ordered to Abu Rafi to return that person’s camel. Abu Rafi ‘(may Allah be pleased with him) came back and said: [There is no camel of the same quality but it is better than that] There is a camel of Rubai Mukhtar [a male camel who has crossed the age of six and entered the seventh year]. The Prophet (peace and blessings of Allaah be upon him) said: Give it; Because good people are the ones who are the best payers. [Muslim, Chapter: Bayu, No. 4108]
Many people, not understanding this beautiful provision of Islam, or pretending not to understand it, or due to immature knowledge or having instinct in the heart, have ruled that it is permissible to give and take extra in the current banking system. Their comment is that just as the Prophet (peace and blessings of Allaah be upon him) gave more when repaying the loan and the lender accepted more, so if we give more to the bank when repaying the loan and they accept it, then there is nothing illegal.
The answer is that there is a big difference between the Prophet’s (PBUH) loan repayment and the current banking system of more transactions.
First of all: the lender did not give the Prophet (peace and blessings of Allaah be upon him) any condition when giving a loan that he should repay more when repaying the loan. On the other hand, the present bank fixes the percentage of overpayment through micro accounts and if it fails to repay it within the stipulated time, the percentage rate increases further. In fact, banks finance through this cycle, and we do not understand.
Secondly: it was not known in the society that if the Prophet (peace be upon him) was given a loan, he would pay extra. Rather, he suddenly gave such an order. For this reason, Islamic scholars agree that it is haraam to have a higher repayment condition on any loan.
Ibn al-Munzir said: They agree that if the lender gives the borrower the condition of repaying the loan at the time of repayment or repaying the loan with a gift and the loan is given accordingly, then taking more is of interest. ‘[Mughni, 6/436] Therefore, it is not lawful to take more time to repay the loan, unless two conditions are met.
A) The lender did not make the condition of profit with the borrower.
B) The practice of giving more is not common in society.
If the condition is given or it is prevalent in the society, then there will be more interest taken. The term conventional is referred to here because it is the same as the conventional condition in Shari’a principles. That is, it does not impose conditions but takes or gives more according to custom and practice, then it will be considered as the condition.
No delay in repaying the loan: When the lender provides the loan for the benefit of the people, it will be the religious and moral responsibility of the borrower to repay it as soon as possible. If they start making excuses instead of doing so and start making false excuses, then mutual love and brotherhood will be lost, enmity will increase, and trust in each other will be lost. Allah the Almighty says: “ What can be the reward of good deeds but a good reward? [ Surah Ar-Rahman – 60 ]
He said in another place: “ Surely Allah commands you to convey to them the rights of the righteous. [ Surah An-Nisa ‘- 58 ] The
Prophet (peace and blessings of Allaah be upon him) said: “ It is oppression for a rich person to make excuses. [Muttafaqun alaih]
He (peace be upon him) added: ” Whoever dies while he is free from the three natures, then he will enter Paradise: arrogance, stealing from the spoils of war and debt.” ”[Ibn Majah, Al-Albani (R) said Sahih]
Death before repaying the loan: Debt is a human right, to die before it is paid means to keep the human right on one’s shoulders, which is a great crime. That is why the Prophet (peace and blessings of Allaah be upon him) did not offer the funeral prayer of such a person himself. Imam Tirmidhi narrates from Abu Qatadah (may Allah be pleased with him) in Hasan-Sahih Sanad, “ Once when the janaza of a person was brought to the Prophet (peace be upon him ), he said: Because he is indebted. ” [Tirmidhi, Chapter: Janazah, No. 1069]
For this reason, Islamic scholars say, “There are certain rights before the distribution of the tareqah (inheritance) of the deceased, and his inheritance will be distributed only after the fulfillment of it.” One of them is the rights of the other over the deceased. That right belongs to Allah, such as zakat or human right, such as debt. ”[Al-Mulakhkhas Al-Fiqhi, Dr. Fauzan / 334]
Giving leave to the needy debtor: Just as there are some people in the society who are slow to repay the loan even though they are able, there are really some people who are unable to repay the loan on time. Islam encourages such people to give extra time. Allaah says (interpretation of the meaning): “ If the debtor is poor, then give him respite until he is well off, and it is better for you to forgive, if you only knew. [ Surat al-Baqarah: 280]
The Prophet (peace and blessings of Allaah be upon him) said: “ Whoever chooses that Allaah will save him from the hardships of the Day of Resurrection, let him give respite to the needy debtor or relieve him of the burden of his debt .” [Muslim, Chapter, Buying and Selling, No. 4000]
I think it is important to mention one thing here, which is, “ If the borrower cannot repay the loan within the stipulated time, then he has to give leave without any profit. But if the lender extends its term and makes a profit in return, it will be a clear interest. For example, if someone wanted to repay his loan after one year but could not repay it at the end of the year, he applied to the lender for an extension of 5 months. Then the lender said to him: OK, I will extend the term, but in return, you will have to pay more than the principal when repaying the loan. That is, taking profit in return for increasing time. This is the obvious interest, which was in the Arabian Peninsula in the time of the Prophet (peace be upon him) and still exists. ”[Al-Mulakhkhas Al-Fiqhi, Dr. Fawzan / 237]
Borrowing for the purpose of non-payment: Nowadays, there is another type of people in the society who take loans for the purpose of non-payment. In other words, in his heart he has to embezzle the money of others. And borrowing is just an excuse. Such people engage in several haraam activities at once.
1) “ Eating the wealth of others in a void manner, which Allah has forbidden. ”[ Baqarah /188]
3) Knowingly and knowingly committing sins.
The Prophet (peace and blessings of Allaah be upon him ) said: “ Whoever intends to pay for the property of others, Allaah pays on his behalf. (Who helps to pay.) And whoever takes it for the purpose of ruin, then Allah will ruin it. [Bukhari, Chapter: Istikraj, No. 2387]
They should refrain from such heinous acts. Because even if this right of man is not realized in this world, it must be realized in the court of Allah in the Hereafter. Rather, Allah will realize it.
Zakat on loans: That is if someone gives a loan to someone and that loan falls under zakat, who should pay zakat? Who owns the goods to the borrower? Or the lender? In fact, the money has just been transferred from the donor to the recipient. Otherwise, its owner is actually the donor. That is why the lender has to pay zakat on the goods. However, Islamic scholars have a little explanation for this: if the borrower is in need, due to which he is unable or unworthy to repay the loan at the right time, then he is an evasive person, from whom it is difficult to recover the loan. In this case, it is not necessary to pay Zakat on the goods to the lender until it is in his hands. And if the debtor is able to repay the loan and there is a good chance of getting the loan, then the lender has to pay his zakat only when it is time for zakat. [Fatwa and Research Standing Committee, 9/191, Fatwa No. 9069]
But if you get a loan from a defaulter after a few years, you don’t have to pay zakat for all the previous years, do you have to pay for one year? In this case, the above fatwa committee has given a fatwa that it should be given within a year. [Standing Fatawa Committee on Fatawa and Research, 9/190]
The Prophet (peace and blessings of Allaah be upon him) used to ask Allaah for more and more refuge from debt, which a person saw and asked him: Messenger of Allaah! Do you seek refuge too much from debt? The Prophet (peace and blessings of Allaah be upon him) said: “When a person is in debt, when he speaks, lies and breaks his promise. [Bukhari, Chapter: Istikraj, No. 2397]
So he used to say: Pronunciation: “ Allahumma! Inni aujubika minal kasali, wal harami, wal ma’chami, wal magram. Translation: ” O Allah! I seek refuge in You from laziness, old age, sin, and debt. [Muslim, Chapter: Zikr and Dua, No. 61]
He (peace be upon him) used to say: Pronunciation: Meaning, ‘ O Allah! I seek refuge in You from thoughts, impotence, laziness, stinginess, and cowardice. From more debt and from the dominance of the wicked. ‘[Nasai, Chapter: Isti’azah, No. 5478]