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Government Loans
(i) Is a government loan that uses the consumer price index and increases by about 3% almost every year based on the rising cost of living considered ribawi or is such a change in the loan amount permissible as it merely rejects current market values? (ii
(i) Such a loan would be ribawi. Increasing a loan to reject inflation, movement on an index, a change in the cost of living, or the like, is not permissible. (ii) For ribawi loans already incurred, the individual should make every effort to get out of them as soon as possible, even if it means taken on a second or third job. (iii) He has to pay off whatever he owes, regardless of it being ribawi or not.

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