Muslims only. Do You Do Hadith(?) Loans?
December 20th, 2011I heard on NPR ‘Marketplace Money’ that Muslims don’t allow borrowing of money.
I heard there were special Muslim-friendly borrowing institutions that have a system set up for Muslims to purchase housing, cars, etc.
How do these work & what is the word for these types of loans (I know ‘hadith’ isn’t the right word)?
Any & all info would be appreciated.
Thank you in advance for all your answers.
INTEREST=RIBA
[274-277] Those who spend their wealth secretly and openly by day and night, will have their reward with their Lord, and they have nothing to fear nor grieve. But those who devour interest315 become like the one whom Satan has bewitched and maddened by his touch.316 They have been condemned to this condition because they say, "Trade is just like interest”,317 whereas Allah has made trade lawful and interest unlawfu1.318 Henceforth, if one abstains from taking interest after receiving this admonition from his Lord, no legal action will be taken against him regarding the interest he had devoured before; his case shall ultimately go to Allah.319 But if one repeats the same crime after this, . he shall go to Hell, where he shall abide for ever. Allah deprives interest of all blessing and develops charity;320 and Allah does not like an ungrateful, sinful person.321 As to those who believe and do good deeds, establish the Salat and pay the Zakat, they will most surely have their reward with their Lord and they will have nothing to fear nor to grieve.322
[278-281] O Believers, fear Allah and give up that interest which is still due to you, if you are true Believers; but if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger.323 If, however, you repent even now (and forego interest), you are entitled to your principal; do no wrong, and no wrong will be done to you. If your debtor be in straitened circumstances, give him time till his monetary condition becomes better. But if you remit the debt by way of charity, it would be better for you, if you only knew it.324 Guard against the disgrace and misery of the bay when you shall return to Allah: there everyone shall be paid in full, for the good or evil one has earned and none shall be wronged.
[282] O Believers, when you contract a debt for a fixed;325 term, you should put it in writing.326 Let a scribe write with equity the document for the parties. The scribe whom Allah has given the gift of literacy should not refuse to write. Let him write and let the one under obligation (the debtor) dictate, and he should fear Allah, his Lord, and should not diminish from or add anything to the terms which have been settled. But if the borrower be of low understanding or weak or unable to dictate (for any reason), then let the guardian of his interests dictate it with equity. And let two men from among you327 bear witness to all such documents. But if two men be not available, there should be one man and two women to bear witness so that if one of the women forgets (anything), the other may remind her. The witnesses should be from among such people whom you approve of as witnesses.328 When the witnesses are asked to testify, they should not refuse to do so. Do not neglect to reduce to writing your transaction for a specified term, whether it be big or small. Allah considers this more just for you, for it facilitates the establishment of evidence and lessens doubts and suspicions. Of course, there is no harm if you do not put in writing the common transactions you conclude daily on the spot,329 but in case of commercial transactions you should have witnesses. The scribe and the witnesses should not be harassed:330 if you do so, you shall be guilty of sin. You should guard against the wrath of Allah; He gives you the knowledge of the right way for Allah has the knowledge of everything.
[283] If you are on a journey and cannot find a scribe to write the document, then transact your business on the security of a pledge in hand.331 And, if any one transacts a piece of business with another merely on trust, then the one who is trusted should fulfil his trust and fear Allah, his Lord And never conceal evidence332 for he who conceals it, has a sinful heart: Allah knows everything that you .
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Follow the footnotes
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315.The Arabic word riba’ literally means "increase in" or "addition to" anything. Technically it was applied to that additional sum which the creditor charged from the debtor at a fixed rate on the principal he lent, that is, interest. At the time of the revelation of the Qur’an, interest was charged in several ways. For instance, a person sold something and fixed a time-limit for the payment of its price, and if the buyer failed to pay it within the fixed period, he was allowed more time but had to pay an additional sum. Or a person lent a sum of money and asked the debtor to pay it back together with an agreed additional sum of money within a fixed period. Or a rate of interest was fixed for a specific period and if the principal along with the interest was not paid within that period, the rate of interest was enhanced for the extended period, and so on.
PS. foot notes are very long and can’t fit here . My e-mail: aahsena@hotmail.com
