Interest-Free Loans* [[---Episode Two---][

 *Interest-Free Loans*

[[---Episode Two---][
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بسم الله الرحمان الرحيم

People have their money (Naira, Dollars etc) in the banks or under the mattress, inside pockets or wherever they hide their money allowing people who are willing to borrow and pay back to suffer.

Servants of Allah!

Islam encourages those who have enough wealth to give interest free loans to those who request it.. Therefore, lending is a beautiful form of worship, when there is a good intention and is done for the sake of Allah (swt) alone.

Now,

*Islamically, can the lender take collateral from the borrower?*

Firstly:

Islam has allowed the lender to ask for or accept collateral from the borrower, if there is fear that the borrower may default payment.

Also,

Making use of items left as collateral without the permission of the borrower is not permissible at all, because the Prophet (saw) said: *“It is not permissible to take a man’s wealth unless he gives it willingly.”* 📚Narrated by Ahmad (20172)

Furthermore,

If the borrower gives permission to the lender to make use of it, if the money owed is in the form of money lent by one person to another, then it is not permissible for the lender to make use of the collateral, even if the borrower gives permission, because a loan that brings a benefit is ribah.

Now,

With regard to benefitting from collateral, as described above, it is stipulated that this benefit should not be in return for delaying the time of payment.. Meaning, the lender should not make use of the collateral because the borrower has delayed payment *(even if the borrower has granted the lender to do so)* bcos this comes under the heading of a loan that brings benefit.

Seconly:

It's more rewarding if the lender give extension of time of repayment, OR cut-off some amount to be repaiad, in case of default, instead of demanding for collateral from the borrower.

*Evidence No 1:*

Prophet (pbuh) said, "Once a man died and was asked, 'What did you use to say (or do) (in your life time)?' He replied, 'I was a businessman and used to give time to the rich to repay his debt and (used to) deduct part of the debt of the poor.' So he was forgiven (his sins.)" Abu Masud said, "I heard the same (Hadith) from the Prophet."  📚(Bukhari 3:41:576)

*Evidence No 2:*

The Prophet (saw) said: “Whoever gives respite to one in difficulty, he will have (the reward of) an act of charity for each day. Whoever gives him respite after payment becomes due, will have (the reward of) an act of charity equal to (the amount of the loan) for each day.” – 📚Ibn Majah

Meaning,

When it comes to payment date but the borrower is short of money and asks for some time, if the lenders give him times, then, for ever each day the payment is delayed, the lender will get the reward of giving sadaqa.

*Evidence No 3:*

Allah (swt) say in surah Al-Baqarah 2:280

وَإِن كَانَ ذُو عُسْرَةٍ فَنَظِرَةٌ إِلَىٰ مَيْسَرَةٍۚ وَأَن تَصَدَّقُوا۟ خَيْرٌ لَّكُمْۖ إِن كُنتُمْ تَعْلَمُونَ

"And if the debtor is in a hard time (has no money), then grant him time till it is easy for him to repay, but if you remit it by way of charity, that is better for you if you only knew" 📚Al-Baqarah 2:280

Now,

*What are the returns of investment of lending (in terms of rewards & benefits) the lender grab?*

*Number 1:* It is one of the Recommended Act:

Lending money to others is considerably one of the most recommended act in Islam. It’s an act based on empathy to........

TO BE CONTINUED



سبحانك اللهم وبحمدك نشهد ان لا اله الا انت نستغفرك ونتوابوااليك