Is a Loan That Charges a Flat Fee Halal?

Answered by Shaykh Abdul-Rahim Reasat

Question:

Assalamu’ alaykum.
I found a company called Clearbanc, and they claim they are interest-free. This is what they say “We don’t charge any interest rate; only a flat fee of 6% for eligible marketing spend and 12% for all other approved business spend.” However, when I applied, it said”
Offer-$150,000 for 10% of your sales until we receive $159,000 when you spend the money on eligible marketing.” Is this halal?

Answer:

Wa ‘alaykum assalam wa rahmatullah wa barakatuh.

I pray you are well.

No, this type of loan is not permissible. Regardless of their wording, it is riba, and you should do your best to avoid it. It falls under the definition of riba. (Maydani, Lubab)

Remember, your avoiding this loan is an act of obedience to Allah and something you’ll be rewarded for. It might be hard to get a halal loan; see it as a sign from Allah that your intended project may not be successful or good for you.

Sometimes, in these matters, people can feel that they are missing out by obeying the Shari’a. It’s true. They are missing out, missing out on many serious sins and problems.

One individual, who I advised to not get a riba-based loan, ignored my advice. He said everyone does it, and you can’t function in the world without such things, etc.

Two years later, when one calamity after another had crushed him, he asked me, “Why have I got so many problems in my life? ”

The intelligent person learns lessons from the experiences of others.

May Allah grant you the best of both worlds, and may He open all the doors of success for you.
[Shaykh] Abdul-Rahim

Checked and Approved by Shaykh Faraz Rabbani

Shaykh Abdul-Rahim Reasat began his studies in Arabic Grammar and Morphology in 2005. After graduating with a degree in English and History, he moved to Damascus in 2007, where, for 18 months, he studied with many erudite scholars. In late 2008 he moved to Amman, Jordan, where he continued his studies for the next six years in Sacred Law (fiqh), legal theory (Usul al-fiqh), theology, hadith methodology, hadith commentary, and Logic. He was also given licenses of mastery in the science of Quranic recital, and he was able to study an extensive curriculum of Quranic sciences, tafsir, Arabic grammar, and Arabic eloquence.