In this article I will be looking at what the Qur’an (God’s final revelation to mankind) has to do say about usury or interest. The Arabic word ribaa means An excess, and an addition: an addition over and above the principal sum [that is lent or expended] (see Lane’s Lexicon: http://lexicon.quranic-research.net/data/10_r/026_rbw.html).
According to the Qur’an, any money charged by a lender in addition to the principal sum lent is ribaa, which is forbidden.
O you who heed warning: consume not usury, doubled and redoubled; and be in prudent fear of God, that you might be successful.The Qur’an: A Complete Revelation (3:130-132)
And be in prudent fear of the Fire prepared for the false claimers of guidance.
And obey God and the Messenger, that you might obtain mercy.
The modern excuse that interest or usury is intrinsic to business is also rejected the Qur’an. God has allowed commercial transactions but He has forbidden usury.
Those who consume usury will not stand save as stands he whom the satan buffets with his touch; for it is that they say: “Commerce is but the same as usury,” when God has made commerce lawful and forbidden usury! And he to whom came the admonition from his Lord, and desisted: he has what is past, and his case is with God. But whoso returns: those are the companions of the Fire; therein they abide eternally.The Qur’an: A Complete Revelation (2:275-276)
God eliminates usury, and increases charity; and God loves not every ingrate and sinner.
God commands in no uncertain terms that the believers give up the practice of usury. They are threatened with war if they do not comply, highlighting the grave nature of this sin.
O you who heed warning: be in prudent fear of God; and give up what remains of usury, if you be believers.
And if you do not, then be informed of war from God and His messenger. But if you repent, then to you are your principal sums; doing no wrong, you will not be wronged.
And if he be one in hardship, then deferment until ease; but that you forgive by way of charity is better for you, if you would know.
And be in prudent fear of a day wherein you will be returned to God; then every soul will be paid in full what it earned; and they will not be wronged.The Qur’an: A Complete Revelation (2:278-281)
Have they not considered that God expands provision for whom He wills, and He straitens? In that are proofs for people who believe.
So give thou the relative his due, and the needy, and the wayfarer. That is best for those who desire the face of God; and it is they who are the successful.
And what you give of usury that it might increase in the wealth of men, there is no increase with God; but what you give of purity, desiring the face of God: it is they who receive recompense manifold.The Qur’an: A Complete Revelation (30:37-39)
While I understand that these verses are directed towards those who take usury from men i.e. the banks/credit card companies in today’s world; it would serve us well to not enter into any loan arrangement which entails interest. It is precisely because men have accepted this exploitative system of usury that it has gained popularity in today’s world. Wherever there is a demand, rest assured, there will be a supply.
Furthermore, it makes financial sense to not get into debt and especially a debt which entails interest as it is very difficult to get out of this hole once you fall into it. On the other hand, it is evident from these verses that giving in charity in good and bad times will result in God giving us from His bounty. So my advice to the believers – to those who have fallen into it – is to get out of it as early and possible and be consistent in giving charity to the poor. This is best course of action for a man who believes in the Last Day and expects God’s help in this life and the next.