How can you avoid Riba?

All Muslims are familiar with the concept of ‘halal’ i.e. that which is permissible and ‘haraam’ i.e. that which is forbidden. However, there are certain aspects of this categorization that demand more clarity. One of these is Riba, which is also commonly known as interest or usury, and it is deemed to be haraam.

The word Riba originates from growth and  in the most literal sense, refers to excess or an increase in something. It is greatly condemned by Allah (SWT) because it plagues society with greed, lust, selfishness and injustice. It is clearly stated in the Holy Quran:

“Whatever you pay as interest so that it may increase (li yarbu) the wealth of people does not increase (fa la yarbu) in the sight of Allah” (Surah Ar-Room 30:39)

This essentially entails that engaging in Riba might increase your wealth, but it will never elevate you in the eyes of Allah (SWT).



Types of Riba

To further shed light on this issue, there are two types of Riba that are forbidden in Islam:

Riba an-Nasee'ah: This is an increase or growth in the original amount of loan/payment/debt due to delay

Riba al-Fadhl: This is an increase in the amount upon exchanging of one thing for another, of the same kind

In both these cases, all parties involved in usury, the ones who takes it and the ones who gives it, are cursed and will be held equally accountable on the day of Judgement. Even the people who act as witnesses to usury invite the condemnation and wrath of Allah (SWT).



Why Islam Prohibits Riba
The whole purpose of an Islamic way of life is to build a community which has a foundation based on goodness, selflessness, empathy, and mutual sacrifice. Islam promotes equality and practices that help bridge the gap between the rich and the poor in society. The practice of usury is therefore condemned because it is another way of taking advantage of individuals in their most vulnerable state. The rich should work towards helping the unfortunate to invoke Allah’S (SWT) love and blessings and not material gain, for Allah (SWT) loves those who give and care for mankind.

The entire matter of interest is rooted in exploitation and suppression stemming from man’s avarice. In communities festered with Riba, the upper class individuals are less inclined to help the unfortunate as the society is run on self-interest.  This further helps explain why all types of interest are unlawful and forbidden in Islam.  In Surah Al-Baqarah :Verse 275, Allah (SWT) says:

"Those who devour usury will not stand except as stand as one whom the Satan by his touch has driven to madness. That is because they say, "trade is like usury", but Allah has permitted trade and has forbidden usury."

And in the very next verse, it is stated that:

"Allah will deprive usury of all blessing, and will give increase for deeds of charity, for he does not love any ungrateful sinner." (Surah Al-Baqrah: 276)

Ways to Avoid Riba
Now that we have established how Riba can bring no good to the society or individual, here are a few ways to avoid it:











Strive to live within your means and not take or give loans which have interest
Make sure to open a Riba-free bank account
Consciously avoid signing contracts which include interest in certain clauses
Be vigilant and pay your bills on time to avoid a late fee
When in need of money, turn to your family and friends and borrow from them instead of loans with interest from banks
Manage a “goodly loan” (al-qard al-hasanah); a loan through which one can incur a kindness towards another human being (free of interest)

Even if one takes extra care not to engage in any activity tainted with usury, we need to constantly seek Allah’s forgiveness as it is easy to not realize the damage one is doing by engaging in an act which will only stray one further from the path of Allah’s (SWT) pleasure. Always remember that Riba is not only destructive for us in this world, but also in the hereafter. We, as Muslims, should strive against interest every day and make a daily conscious effort to avoid it, for the one who does not engage in this activity, will get God’s mercy and blessings:

“God condemns Riba, and blesses charities...O you who believe, you shall observe God and refrain from all kinds of Riba, if you are believers. If you do not, then expect a war from God and his messenger. But if you repent, you may keep your capitals, without inflicting injustice, or incurring injustice. If the debtor is unable to pay, wait for a better time. If you give up the loan as a charity, it would be better for you”. (Surah Baqarah: 276-280)