Search Islamic Finance Answers

1,000+ scholar-approved answers and growing...

Charging Interest

Is it lawful to charge interest on a sum of money?

It is unlawful to charge any kind of interest rate, whether floating or fixed, on a sum of money, though it is lawful to agree before transacting that a good or service (but not money) transacted on spot is priced at x, and the same good or service transacted in future is priced at x + y (or x – y), where y is the pre-agreed premium (or discount); but an obligatory condition for such an agreement is that both parties must agree on spot whether the transaction will be executed on spot or in future and for the price to be fixed on spot; it would be impermissible to agree open-endedly that the buyer is entitled to make a future choice of whether to buy on spot or not and for the price not to be fixed.

7 Day Free Islamic Finance Course

Please enter your first name and email address to start receiving your CIFE™ lessons instantly!

We value your privacy. We will never rent, sell, or spam email addresses.

ASK AN ISLAMIC FINANCE QUESTION

Each question is reviewed by an Islamic finance expert and approved by a scholar.

Ask Now »

SEARCH ISLAMIC FINANCE Q&As

Browse one of the world's largest database of Islamic finance Q&As available online.

View details »

What’s New at Ethica

Press releases, live events, book recommendations, discount offers, and more

View details »