How Can I Repay a Huge Debt Without Falling Into Usury?

Answered by Shaykh Umer Mian

Question: Assalamu alaykum

I am in a huge debt so in order to pay my while debt I am borrowing money from my brother for a 2 years period. I also have a business of 20% share.

Can I offer my full profit to my brother as a return yearly after getting my profit?

Answer: Wa alaikum as-salam wa rahmatullahi wa barakatuhu

Linguistically, the word “riba” in Arabic means an “increment” or an “addition.” In Islamic sacred law, Riba (usury) is defined as follows:

( الفصل السادس في تفسير الربا وأحكامه ) وهو في الشرع عبارة عن فضل مال لا يقابله عوض في معاوضة مال بمال (الفتاوى الهندية، كتاب البيوع)

“In Islamic sacred law, riba is an amount of wealth contractually exchanged without any equivalent” (al-Fatawa al-Hindiyyah, Kitab al-Buyu’, Fasl fi tafsir al-Riba wa ahkamihi).

The companion Sayyiduna Fudhala ibn Ubayd (Allah be pleased with him) defines Riba in the following words:

“Any lending arrangement which derives benefit is riba.” (Sunan al-Bayhaqi, also see: Ibn Nujaym, al-Ashbah wa al-Naza’ir, Ibn Abidin, Radd al-Muhtar, 5/166).

Hence, any extra payment on a loan is considered to be Riba and therefore unlawful.

In light of the above, you should not stipulate that your brother receives a portion of your profit as repayment for the loan. What if the profit received turns out to be more than the loan amount? The extra amount would be riba. Instead, you should stipulate in the contract and intend to repay the loan in the exact amount received from your brother.

Wassalam,
[Shaykh] Umer Mian