Disposing of Interest

How to dispose of intrest moeny

Allah all might declares war in the Holy Quran upon those who deal with interest:


“Oh you who believe, fear Allah and leave what is owed to you from usurious transactions if you are true believers. If you do not leave these usurious transactions’ then preparefor a war against Allah and His messenger.” (2:278/ 279)


There are also numerous ahdeeth that have been narrated regarding the prohibition of interest:


Hazrat Jabir radhiallahu anhu states that “Rasulullah sallallahu alaihi wasallam cursed the following people with a link to interest: The one who gives it, the one who takes it, the one who records it and the witnesses to the transaction.” And He sallallahu alaihi wasallam said: “They are all equal in guilt.” (Sahih Muslim- 1598)


Hazrat Ibn Mas’ud radhiallahu anhu narrates that Rasulullah sallallahu alaihi wasallam said: “Verily interest; no matter how much it may be; will always ultimately lead to scarcity and paucity.” (Mishkat- 2827)


We live in a world where interest is unfortunately embedded in almost every segment of society; from home ownership to buying furniture, from education to loans etc. The result and consequence of this miscarriage of justice is exactly how Rasulullah sallallahu alaihi wasallam prophesized; scarcity, insufficiency and paucity of wealth no matter how much the interest may be.


The question now arises that as Muslims living in a world where giving and receiving interest is almost inevitable and unavoidable, what should we do? How should we deal with and dispose of this filthy and foul interest money? People ask whether they can use the interest money they receive to fill petrol in their cars, others ask if they can use it to pay of other interest that they owe to another debtor and some people even have the audacity and audaciousness to ask whether they can spend it as normal.


The first and foremost thing that one needs to realize is that dealing with interest; whether one is on the receiving side or the giving side; is totally impermissible, reprehensible and blameworthy. If an interest-free facility can be used to attain ones goal, to fulfill ones need, it will be incumbent to utilize this interest free means and avoid that which involves interest.


There are a few principles regarding how interest money should be disposed of.


    • The ideal thing to do is to return the interest money to source (provided that the source can be traced).


    • If a person receives interest from a certain individual, body or institution, and also owes interest to the same individual, body or institute, then the interest receivables may be used to offset the interest payables.


    • Interest received from government institutes may be used to offset government taxes.


    • If this (returning the interest money to source) is not possible, the interest money is Waajib-ut-tasadduq meaning that it is necessary to dispose of it by giving it away in charity; to the poor. This is not the normal Sadaqah which a Muslim gives out of his lawful wealth with an intention to get reward in the Hereafter. Instead, this Sadaqah is meant only for disposing unclean and unlawful money and to relieve oneself from the burden of an ill-gotten gain without expectation of reward. (Poor people are those people who are entitled to receive zakat; i.e. they must not possess the nisab of Zakat.


    • This interest amount may also be given to one’s close relatives who are entitled to Zakat so much so that if ones’ children are eligible to receive Zakat, this interest money may be given to them.


    • It should be remembered that this interest money is unclean only for the person who has received it as interest. The poor persons who this interest money is given to may are permitted to use this amount for their personal benefits.


    • It is also permissible to dispose of interest money by giving it directly in public welfare projects (public toilets etc.)


    • It is not permissible to use interest money for the purposes of a Masjid; be it construction, utility bills, paving etc.



To keep abreast of current business related and other fatawa, visit: AskImam.org and DarulIftaa.net.


And Allah Knows Best.


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Tayyib HMC FInder

Content Soul


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