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Repaying more than the principal of a loan is prohibited

Question and Answer:

Q. If you were given a loan by a Muslim to purchase an asset ( A Home ) and no specific repayment date was agreed . The asset has appreciated in value , Should the repayment of the loan be the Principal loan amount or should  the Amount be re-calculated relative to the Gain in value of the Home.

If the later would that be considered as usuary/ interest ?


(Query published as received)


A. Only the principal of the loan should be paid back regardless of the increase in value of the house. Any amount more than the principal (original amount of the loan) will be Riba (interest) which is prohibited.


Question and Answer:

Q. I have a store where I sell goods for cash and on credit. The goods that I sell on credit are sold at a 10% markup due to the differed payment. Is this permissible?


(Query published as received)


A. It is permissible to sell items at a higher price if sold on credit. This will be on condition that the price is fixed at the time of the transaction; for example, the cash price of an item is R500 but on credit, it is for R600 payable over six months at R100 per month. (al-Hidaya, Fatawa Mahmudiyyah, Vol: 24, Pg: 195)



And Allah Knows Best



Mufti Suhail Tarmahomed



Fatwa Department
Jamiatul Ulama (KZN) 

Council of Muslim Theologians
223 Alpine Road, Overport, Durban
Tel: +27 (0) 31 2077099
Fax : +27(0) 31 2074163
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