5.6.2 Riba (Interest)

Meaning and Seriousness of Riba

Riba is an Arabic word that literally means increase, excess, or growth. In Islamic law it refers to any unjustified additional amount taken over the principal in a loan or certain exchanges. In simple terms it is taking or paying a guaranteed extra amount on money loans or on specific types of goods in a way that Allah and His Messenger ﷺ have forbidden.

Allah declared riba clearly prohibited in the Qur’an and described it as a grave sin. He compared it with charity and made their difference a sign of true faith.

“Those who consume riba will not stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, ‘Trade is like riba.’ But Allah has permitted trade and forbidden riba…”
(Qur’an 2:275)

“O you who have believed, fear Allah and give up what remains [due to you] of riba, if you should be believers. And if you do not, then be informed of a war from Allah and His Messenger…”
(Qur’an 2:278–279)

The Prophet ﷺ taught that riba destroys blessing and brings severe consequences in this life and the next. He said:

“Riba, even if it is much, its end result is to little and loss.”
(Ibn Mājah)

He also counted dealing in riba among the most destructive sins.

“…He mentioned, ‘Shirk with Allah, disobedience to parents, and false speech,’ and in other narrations dealing in riba is counted among the major sins.”
(al-Bukhārī, Muslim, and others with similar wording)

Types of Riba

Islamic scholars, based on the texts, speak about two main forms of riba that concern everyday transactions: riba in loans and riba in certain sales.

Riba in Loans (Riba an-Nasīʾah)

This is the most familiar type in modern times. It occurs when a sum of money is lent on the condition that more is repaid than was given, whether the extra is a fixed amount or a percentage and whether the extra is small or large.

Before Islam, Arab moneylenders would say to the borrower when the repayment was due: “Either pay now or I will increase the amount and delay the deadline.” This is exactly the kind of addition that Islam prohibited.

“…and Allah has permitted trade and forbidden riba…”
(Qur’an 2:275)

So if a person lends 1,000 units of currency and requires that 1,100 be repaid after a fixed time, the extra 100 is riba. If the lender extends more time in exchange for more money, that extra is riba.

Riba in Sales (Riba al-Faḍl)

Riba can also occur in certain exchange transactions. The Prophet ﷺ explained that particular goods, when exchanged, must meet certain conditions. These goods include gold, silver, and staple foods like wheat, barley, dates, and salt.

He ﷺ said:

“Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, equal for equal, hand to hand. Whoever increases or seeks an increase has engaged in riba.”
(Muslim)

From this we learn that if two items of the same kind are exchanged, they must be equal in amount and exchanged on the spot. If one side receives more in amount, or the exchange is delayed for one of them, riba al-faḍl can occur.

For example, exchanging 10 grams of gold for 11 grams of gold in a deal that is concluded at the same time is riba, even if both accept it. Or selling 1 kilogram of dates for 1.5 kilograms of the same quality dates in a delayed payment form is also riba. The purpose of these rules is to close the doors that lead to hidden forms of interest through unfair exchanges.

Why Riba Is Prohibited

Islamic law treats riba as a serious crime because it contradicts justice and mercy and corrupts the economy and social relations. The Qur’an shows that riba opposes the spirit of charity and care for the weak.

“Allah destroys riba and gives increase for charities. And Allah does not like every sinning disbeliever.”
(Qur’an 2:276)

Riba enables the lender to grow wealth without effort, risk, or sharing in loss, while the borrower carries all the burden. The stronger party grows richer simply through time passing, even if the borrower is struggling. This leads to exploitation of the needy and widens the gap between the wealthy and the poor.

The Prophet ﷺ cursed all sides who willingly participate in such oppression. He said:

“Allah has cursed the one who consumes riba, the one who pays it, the one who writes it down, and the two who witness it.” He said, “They are all the same [in sin].”
(Muslim)

Riba also encourages a mindset of greed and security in guaranteed profit, instead of productive investment, trade, and real work that benefits society. Islam permits profit through trade and partnership where both parties share risk and reward, and it forbids guaranteed extra gains simply because money was lent.

The Scope of the Prohibition

Because the prohibition of riba is so severe, the prophetic texts cover everyone who helps in making a riba contract possible in a direct way. The one who takes the interest, the one who pays it, and those who write and witness the agreement when they know what it is are included in the sin if they do so willingly.

“They are all the same [in sin].”
(Muslim)

At the same time, the blame is greatest on the one who consumes riba, because he is the one who benefits from the oppression of others. The Prophet ﷺ said:

“A dirham of riba that a man knowingly consumes is worse in the sight of Allah than committing fornication thirty three times.”
(Ahmad)

This shows the gravity of the sin, not through exact numerical comparison, but by warning the believer that it is not a light matter.

Everyday Examples of Riba

For a beginner, several common situations are helpful to understand how riba appears in everyday life. Details of rulings and exceptions belong to Islamic law studies, but the basic picture is important.

A common example is a conventional interest based loan from a bank or person, where a borrower takes a sum of money and agrees to repay it with a fixed or percentage increase after a certain time. The extra amount is riba.

Another example is a savings account that guarantees a fixed interest payment on deposited money. The extra money is a return purely for lending the bank the funds and is therefore riba.

Credit cards often involve riba when there is a known interest rate charged on the outstanding balance after a grace period. If the user does not pay the full amount on time, the added interest is riba.

In older societies, moneylenders might lend to farmers or workers and then double the amount when they could not repay on time. The Qur’anic verses were revealed in an environment where this kind of practice existed.

In trade, using gold, silver, or their modern equivalents to exchange in unequal amounts of the same type or with delay can involve riba al-faḍl or riba an-nasīʾah. In modern times, this has implications for currency exchange rules, since paper money represents value as well.

The general idea is that lending money should be an act of assistance and kindness, not a means of guaranteed profit. For this reason Islam strongly encourages loans without extra benefit.

“Who is it that will lend to Allah a goodly loan so that He may multiply it for him many times over?”
(Qur’an 2:245)

The phrase “lend to Allah” means helping Allah’s servants for Allah’s sake, with no worldly condition of extra benefit.

Riba and Oppression

Riba is linked in the Qur’an with injustice. People who take advantage of the needy by making their difficulty a chance for easy gain are warned. Riba can trap people in cycles of debt that grow larger than their ability to pay, which brings humiliation and misery.

“And if the debtor is in hardship, then [let there be] postponement until [a time of] ease. But if you give [from your right as] charity, then it is better for you, if you only knew.”
(Qur’an 2:280)

This verse teaches the opposite of riba. Rather than increasing the amount when someone cannot pay, the believer is urged to delay repayment, or even forgive part or all of the debt. This behavior brings mercy and blessing instead of war from Allah.

The Prophet ﷺ spoke of a man who used to say to his workers:

“When you see someone in difficulty, overlook [some of the debt], perhaps Allah will overlook us.” The Prophet ﷺ continued, “So Allah overlooked him.”
(Muslim)

This illustrates how mercy in financial matters leads to Allah’s mercy, while harshness and interest based exploitation draw His anger.

Alternatives to Riba

Islam forbids riba but does not close the door to earning. Instead, it invites believers to lawful ways of profit and growth, based on justice and shared benefit.

Allah said:

“…Allah has permitted trade and forbidden riba…”
(Qur’an 2:275)

Permissible trade includes buying and selling real goods and services at agreed prices, investing in businesses, and entering partnerships where both sides share profit and loss according to clear agreement. In these forms, profit is linked to real activity and risk, not simply the passage of time over a loan.

Muslim scholars have also spoken of contracts such as profit sharing partnerships and cost plus sales with full disclosure. All of these aim to provide means for people to invest, build, and finance needs without resorting to riba.

At the basic personal level, believers are encouraged to help each other with interest free loans, especially to relatives, friends, and the poor. The Prophet ﷺ said:

“Every loan which brings a benefit is a form of riba.”
(Reported in various collections with supporting chains)

This means that a lender should not make any material benefit a condition for the loan, whether in money, goods, or special favors, because such a condition turns the benefit into riba. If the borrower voluntarily gives a gift after repayment without prior condition, that is allowed, as long as it is not an agreed precondition.

Repentance from Riba

For someone who has taken part in riba out of ignorance or weakness, the door of repentance remains open as long as a person is alive. Allah, after warning of war against those who persist in riba, gave a clear path back.

“But if you repent, you may have your principal, [thus] you do no wrong, nor are you wronged.”
(Qur’an 2:279)

The steps of repentance include stopping the riba transaction, not agreeing to any new interest based contracts, feeling sincere regret for the past, and resolving not to return to it. The principal amount that was lent remains the right of the lender. The extra interest, if it was received, is not to be enjoyed, and scholars explain that it should be disposed of in a way that does not count as charity for reward, such as giving it to the poor or to public benefit, without the intention of drawing closer to Allah with that specific wealth.

The Prophet ﷺ said:

“Whoever repents before the sun rises from the west, Allah will accept his repentance.”
(Muslim)

This includes the one who repents from riba, even if the past was long. What matters is sincerity, correction of one’s dealings as much as possible, and effort to live according to the lawful means that Allah has allowed.

Living in a World Filled with Riba

In many modern societies, riba based systems are widespread. This makes avoiding riba a real test of faith, patience, and creativity. The believer is encouraged to seek lawful paths, to learn, and to ask scholars about specific cases.

The Prophet ﷺ foretold that a time would come when riba would touch many people, directly or indirectly.

“A time will come upon people when none will remain but that he will consume riba, and whoever does not consume it will be affected by its dust.”
(Ahmad and Abū Dāwūd)

This hadith is a warning and a reminder. It shows the difficulty of avoiding every indirect effect in complex financial systems, but it does not make riba permissible. A Muslim strives to stay away from direct and clear involvement in riba, to reduce indirect exposure where possible, and to have a heart that rejects it.

The believer should combine caution with trust in Allah. The one who leaves a forbidden income for Allah’s sake will not be abandoned. The Prophet ﷺ said:

“You do not leave something for the sake of Allah except that Allah will replace it for you with something better than it.”
(Ahmad)

So the attitude of the believer is to recognize riba as a major sin, to avoid it, to seek lawful livelihood, and to trust that obedience to Allah, even in financial matters, is the real path to blessing and success.