Borrowing and Lending

بسم الله الرحمن الرحيم
In the Name of Allah, Most Merciful, Most Compassionate
Assalaamu alaykum

Dear Friends

I pray that you are well.

There is a very strong caution against debt. Even if the borrowing is Shari'ah compliant, it is still a debt and there are consequences beyond mere paying it off. We should incline to avoid borrowing.

It was narrated from Aisha (may Allah be pleased with her) that the Prophet, Allah bless him and grant him peace, used to say in his prayer: “Allaahumma inni a’udhi bika min al-ma’tham wa’l-maghram (O Allah, I seek refuge with You from sin and heavy debt).” Someone said to him: “How often you seek refuge from heavy debt!” He said: “When a man gets into debt, he speak and tells lies, and he makes a promise and breaks it.” [Bukhari and Muslim]

Narrated from Thawbaan (may Allah be pleased with him) that the Messenger of Allah, Allah bless him and grant him peace, said: “Whoever dies free from three things – arrogance, cheating and debt – will enter Paradise.” [Tirmidhi]

Taking on debt is a serious matter and there are negative consequences. It is an indicative of a desire for immediate gratification, lack of concern for the future, there is a sense of lack of responsibility and lack of self reliance, and can lead one into harm by falling into riba.

If you don't pay your debt, you are wronging someone, either directly or indirectly. It is also a spiritual drag because it preoccupies the mind and makes you worry about paying it off and make you feel humiliated before the lender when meeting him. You may end up breaking the promise to pay or getting yourself in a situation where you are disgraced.

It was narrated that ‘Umar ibn al-Khattaab (may Allah be pleased with him) said: "Beware of debt, for it starts with worry and it ends with war." Narrated by Maalik in al-Muwatta’.

Debts shift one's concern away from Allah. It is a spiritual burden. Now you have to busy yourself more in earning money to repay that debt.

The ultimate consequence of debt is that you might die without paying off the debt. Dying with debt is not a light matter.

Narrated Abu Hurayrah: The Messenger of Allah, Allah bless him and grant him peace, said: “The soul of the believer is suspended because of his debt until it is paid off.” [Tirmidhi]

Narrated from Muhammad ibn Jahsh (may Allah be pleased with him): We were sitting with the Messenger of Allah, Allah bless him and grant him peace, when he raised his head towards the sky, then he put his palm on his forehead and said: “Subhan-Allah! What a strict issue has been revealed to me!” We remained silent and were afraid. The following morning I asked him, “O Messenger of Allah, what is this strict issue that has been revealed?” He said, “By the One in Whose hand is my soul, if a man were killed in battle for the sake of Allah, then brought back to life, then killed and brought back to life again, then killed, and he owed a debt, he would not enter Paradise until his debt was paid off.” [Nasaa'i]

If your family or friends you left behind didn't settle your debts for you, it will be dealt with in the Day of Judgment. It will be paid off with your good deeds to the last penny.

Ibn ‘Umar (may Allah be pleased with him) said: O Humraan, fear Allah and do not die in debt, lest it be taken from your good deeds when there will be no dinars and no dirhams.

Borrowing in itself is permitted but there is proper approach to borrowing.

1. Avoid borrowing but if you have to borrow, borrow only to the extent of need.

2. Avoid accumulating debt. Even if you are needy, don't keep borrowing. Consider trimming and reducing your expenses and maybe you can sell some of your possessions to avoid getting into debt. You don't want to fall into the haram. Never borrow more than you can repay--short term or long term.

3. Be careful not to fall into the haram.

Be careful when it comes to bank loans and using credit cards to buy things.

Riba is haram. Don't fall into it directly or indirectly. Consider the gravity of the prohibition of riba. Maybe you find a "fatwa" that might allow you to get into certain ribawi transaction but look at the bigger picture--which is the next life, not just this life. Is going outside the limits of Allah worth it? Is taking dubious "fatwa" worth it in your standing with Allah? What is the greatest advantage to you in your standing with Allah? Ask your heart and you know what the answer is.

Ultimately the purpose of religion comes to preserve the absolute human interests, which is the good of the next life. The Shari'ah seeks to preserve this worldly interests in so far it is a means to the pursuit of the ultimate next worldly interests or it is not in contradiction to the ultimate eternal interests of the next life. So, we should have a sense of caution and avoid things that are dubious.

4. Beware falling into inability to pay. Don't plan to pay on the basis of things remaining as they are. Consider contingencies (medical emergencies, job loss, etc), which makes you suddenly can't pay your debt.

5. If you have to borrow and do borrow, repay the loan on time. Only borrow when you know you can pay on time. If you can't pay on time, don't borrow.

6. Repay the debt with excellence. You repay on time or before time and do it in the best of ways. Make sure to thank the giver. Even though riba is haram, it is sunnah to give more than the amount you borrowed as long as there is no expectation or custom of repaying more. If there is an expectation, don't get into the situation nor uphold it. Give the giver a gift as a way to thank the giver.

What is permissible is not necessarily the right thing to do or something Islamically optimal. All it means is that this is something that is not disliked in itself nor prohibited in itself. Something permissible could entail disliked meanings. For example, the awra (nakedness) of a man is between the navel and knees. It is permitted for a man to dress only in a towel if you cover from navel to knees but is it proper to walk around with towels? Certainly not. It is not a proper dress befitting a believer.

Likewise, though debts are permitted, one has to consider the consequences of debts. Matters are by their consequences. This applies to lending money as well. It is praiseworthy to lend.

Hadith: Every loan is charity.

If someone in need, there is great virtue in lending. When you lend someone money you are instilling in them a sense of responsibility to repay and they have to take the means to repay the debt. But you should ask to whom do you lend, will this person be able to repay, will it affect your relationship negatively, and consider how you go about lending the money and be careful not fall into haram, directly or indirectly.

Hadith: Any loan that yield benefit is riba.

O Allah, we seek refuge with You from sin and heavy debt.

Please don't forget us in your night prayers. Jazakallahu khairan.

And Allah knows best.
Wassalaam