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Can Muslims Take On Debt, Make Large Purchases?



Reply Date

Feb 26, 2017


Show Muslims avoid taking on debt and making large purchases that will incur debt?




Asalamu Alaikum,

Thank you for contacting About Islam with your question.

Dr. Shabir Ally addresses this question in the video below:


Aisha Khaja: Dr. Shabir, the question that we have is: what do the Muslims teach about money and being in debt. And the viewer goes on to ask: how does this affect our ability to purchase large items like houses and cars?

Dr. Shabir Ally: Probably, the question is that this is hinting at the Islamic prohibition on taking or giving interest. And because that would explain, you know, the question about how do we purchase large items. But let me let me just give the overview.

The questioner seems to be asking what about our teaching regarding money and so on. First of all, money does not seem to be a bad thing in and of itself. It seems to be a blessing from God. It depends on how you earn it, and how you spend it.

You should earn it in a halal or permissible way and you should spend it in good things. So, buying things that you will use and enjoy are within the permissible limits of the Islamic law. And at the same time, giving some in charity to other people especially those who are less fortunate, so that the wealth is shared.

One of the issues that comes up is with regards to borrowing: the Muslim attitude should be to be as free of debt as possible because sometimes you’re in debt, indebted and you feel burdened by that. Sometimes people are driven to give excuses because they can’t pay up on time, and so on.

So, a Muslim has to be forthright and truthful in all circumstances. And sometimes that is compromised if one feels under the pressure of debt and not being able to meet the deadlines for repayment. And taking a loan on interest has been deemed to be impermissible.

But the main issue is really the receiving of interest, which is condemned in the Quran again and again. Why? Because the one who has extra money to be able to loan it, really doesn’t really need to claim something back from the person who needs to borrow.  

The person who needs to borrow usually is in the less fortunate situation. And to have to pay back not only the loan, but also interest on top of the loan is really going the opposite way from charity. Charity transfers money from the rich to the poor, but interest transfers money from the poor to the rich.

And so, this is deemed to be impermissible. But to have nothing to do with such loans at all, Muslims have been advised not to get into any such transaction not even to take a loan on interest.

But the essential privation is with receiving interest, not giving it.

I hope this helps answer your question. Please keep in touch.

Walaikum Asalam.

Please continue feeding your curiosity, and find more info in the following links:

Zakah and the Economic System in Islam

UK Introduces Halal Loans for Muslim Students

Can I Deduce My Debt from My Zakah?

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