Taking a loan on interest

Question

Question: Zayd found himself in dire need of money, and out of compulsion he pawned his property and took money as a loan on interest. In such a situation, when money is taken on interest in a state of severe compulsion, what is the ruling, and will Zayd, being compelled, be sinful for this act or not?

Answer

Giving interest is haram; a curse upon such a person has come in the noble hadith. Committing what is haram in a state of dire necessity (idtirar) is pardoned. So if there is a strong danger to life or a strong danger to honour, and moreover there is no other way to avoid it — for example, neither can the property be sold nor can money be obtained without interest — then in…

Source: Fatawa Mahmudiyya

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