Question:

Is it permissible to get a loan and go into debt for something that isn’t a necessity rather just for a want?

Answer:

Alhamdulillah, praise and gratitude to Allah SWT for His countless blessings for us all. Praise and salutations to our beloved Prophet Muhammad PBUH, his family, companions, and all those who follow his footsteps until the Final day.

In Arabic, it is stated as al-qardh (القَرضَ). Al-Qardh lexically means cut. According to the dictionary al-Misbah al-Munir [2]: ‘قَرَضْتُ الشَّيْءَ قَرْضًا’ means I’m cutting something. This noun means something given to another on loan. This word is used in Arabic for it (loan) cuts the owner’s right on the item.

According to the jurists, a loan is giving ownership of an item to another on the condition the person returns it without any addition. In Arabic, this process is named qardh, for this process results in the owner’s ownership being cut to be given to the debtor. This is in line with the literal meaning of qardh.

Allah SWT commanded the believers to record any loan or debt and its due date or deadline of payment. Allah SWT states in the Quran:

يَا أَيُّهَا الَّذِينَ آمَنُوا إِذَا تَدَايَنتُم بِدَيْنٍ إِلَىٰ أَجَلٍ مُّسَمًّى فَاكْتُبُوهُ ۚ وَلْيَكْتُب بَّيْنَكُمْ كَاتِبٌ بِالْعَدْلِ

“O you who have believed, when you contract a debt for a specified term, write it down. And let a scribe write [it] between you in justice.” [4]

Generally, debt in Islam is permissible and follows the syarak. A person in need is permissible and sunnah to ask from another without any guilty conscience. Furthermore, it is the responsibility of the person being asked. This is stated in Allah SWT’s book and scholars’ ijma’.

The wisdom for the sanctioning of this practice is clearly to realize Allah SWT’s wish to create an environment where people help one another for good intentions and taqwa amongst the Muslim ummah. Moreover, this practice can also strengthen the brotherhood relationship between Muslims by asking them to help those who are in need and suffering.

Furthermore, the Prophet PBUH encourages us to give out a loan for those who are in need stating certain advantages. The Prophet PBUH said:

مَنْ أَقْرَضَ لله مَرَّتَيْنِ كَانَ لَهُ مِثْلُ أَجْرِ أَحَدِهِمَا لَوْ تَصَدَّقَ بِهِ

“Whoever gives out a loan for Allah twice, for him are great rewards as though he lets go of one of the loans,” [6]

Allah SWT also promises safety from hardship in the hereafter for those who settle the debt of his brother who was troubled in this world. The Prophet PBUH said the following as narrated by Abu Hurairah RA:

مَنْ نَفَّسَ عَنْ أَخِيهِ كُرْبَةً مِنْ كُرَبِ الدُّنْيَا نَفَّسَ اللَّهُ عَنْهُ كُرْبَةً مِنْ كُرَبِ يَوْمِ الْقِيَامَةِ

“If anyone relieves a Muslim believer from one of the hardships of this worldly life, Allah will relieve him of one of the hardships of the Day of Resurrection.” [7]

According to the above question, a person who wants to go into debt must be in urgent need. This is based on a hadith narrated by Anas RA, where the Prophet PBUH said:

والمُسْتَقْرِضُ لَا يَسْتَقْرِضُ إلَّا مِنْ حَاجَةٍ

“The one who asks for a loan does so only because he is in need.” [8]

We can understand that a person asks for a loan or go into debt only when he needs to fulfil his necessities and not for luxury. The reason is necessities here explained by scholars are his basic urgent needs. Such as in buying a car which is a necessity in our current age. However, going into debt just to buy a luxury car or the latest smartphone is not a necessity and this is prohibited by scholars.

Going into debt can sometimes be prohibited, obligatory or permissible. It is prohibited to go into debt for those who are not in urgent need and he isn’t able to pay it back immediately or cannot pay it back in the determined time. [9]

In Imam al-Ramli’s opinion, if a person gives out a loan, knowing that it will be misused, then it is impermissible to give out a loan for the individual. [10]

To conclude, we advise you to not go into debt if there is no urgent need. The reason is the act of going into debt is a burden that one has to bear in the future. We suggest that people should be aware of matters related to financial management so that we can evaluate which is an urgent need and which are just our wants. We end this discussion with the advice from Uqbah bin Amir RA to his son on his dying bed:

يَا بَنِيَّ إنِّي أَنْهَاكُمْ عَنْ ثَلاَثٍ فَاحْتَفِظُوا بِهَا: لاَ تَقْبَلُوا الْحَدِيثَ عَنْ رَسُولِ الله – صلى الله عليه وسلم – إلاَّ مِنْ ثِقَةٍ، وَلاَ تَدَيَّنُوا وَلَو لَبِسْتُمُ الْعَبَاءَ. وَلاَ تَكْتُبُوا شِعْراً تَشْغَلُوا بِهِ قُلُوبَكُمْ عَنِ الْقُرْآنِ

“O my son, indeed I prohibit you from 3 matters, take my advice: Don’t narrate a hadith of Rasullullah PBUH except from a thiqah (trustworthy) person, don’t go into debt unless if you’re forced to wear animal fur and don’t busy yourself writing poetry that you’re distracted from the Quran.” [11]

This shows that we need to avoid purposely going into debt unnecessarily. May Allah gives us calmness and contentment as well as protect us from the burden of debt. Amin.

Wallahu a’lam.

[1] See al-Fiqh al-Manhaji, (6/82), Mughni al-Muhtaj, (2/117) and al-Taqrirat al-Sadidah, Qism al-Buyu’, (pg. 45)

[2] See al-Misbah al-Munir, 2/497

[3] See al-Fiqh al-Manhaji, 4/121-122

[4] Surah al-Baqarah: 282

[5] See al-Fiqh al-Manhaji, 4/121-122

[6] Narrated by Ibnu Hibban (5040)

[7] Narrated by al-Tirmizi (2945)

[8] Narrated by Ibn Majah (2431), Ibn Hibban in al-Majruhin (1/320) and al-Tabrani in al-Mu’jam al-Ausat (6719). This hadith is evaluated as dhaif jiddan (very weak) according to the book al-Silsilah al-Dha’ifah (3637)

[9] See Al-Taqrirat al-Sadidah pg. 45)

[10] See Nihayah al-Muhtaj Ila Syarh al-Minhaj 4/221

[11] Narrated by al-Tabrani in Mu’jam al-Kabir (737). Also see Majma’ al-Zawaid by al-Haithami (1/145)