Interest: Its effects on good actions

Q288 :Because my savings are not enough for the purpose, I have been contemplating the possibility of obtaining a bank loan in order to build a house for my family. My father has written to me that this is not acceptable from the Islamic point of view. He also said that my prayer, sacrifice, zakah and other acts of worship will not be acceptable in this building. Moreover, the bank clerk is asking for a commission to release the loan which I feel that it is, in actual fact, a bribe. I will be grateful for your advice.

A288 : There are two main aspects to the first question : Obtaining a bank loan and paying interest on the borrowed money; and the effect of such an action on one's good deeds. The question of bribe is a side issue on which we will talk later. There is no doubt that dealing in usury, whether one receives it or pays it, is forbidden. The Prophet says: "Allah curses the one who devours usury, the one who pays it, the one who writes the contract between them and the two witnesses to the contract." A straightforward bank loan which earns interest falls within this type of transaction. Therefore, if you go to the bank and ask for a loan and you arrange to pay it back by installments, adding interest to the principle amount you obtained from the bank, then you are committing a serious offense. Muslims who live in Europe and America often face the problem of buying a house on mortgage. Several scholars have reluctantly sanctioned forms of this transaction on the basis of necessity. Since banks offer different forms of mortgages, each one will have to be judged on its terms and conditions. The other aspect of your question concerns the effect of taking a bank loan which is accompanied by the payment of interest on your worship and other good deeds. Your father tells you that your prayer and zakah and other good deeds, which you may do in your house, partially financed by a bank loan, will not be acceptable. I am afraid your father is mistaken. Allah says in the Qur'an : "Whoever has done an atom's weight of good will see it then and whoever had done an atom's weight of evil will see it then also." (99; 7-8) This means that what you do of good deeds will be credited to you, but your bad ones will be recorded against you as well. It is unbelievers whose good actions are of no use to them because their actions are not based on the proper foundation of good deeds, namely, faith. I am afraid, however, that dealing with usury is a very serious offense which could require much more than the fulfillment of basic duties to offset it. If you are to pay bribe in order to get that loan, then there is all the more reason for not getting it. Payment of bribes is forbidden. Allah curses the one who bribes and the one who receives bribery.

Our Dialogue ( Source : Arab News - Jeddah )