is it haram

Is It Haram to Receive Interest? Unveiling the Islamic Perspective on Interest Earnings


Interest, also known as riba, has been a topic of debate and discussion in Islamic finance for centuries. Many Muslims question whether receiving interest is haram (prohibited) or halal (permissible) according to Islamic teachings. In this article, we will delve into the Islamic perspective on interest earnings and explore the reasons behind the prohibition of riba.

is it haram
is it haram why

The Prohibition of Riba in Islam

In Islamic finance, riba refers to any excess or increase in a financial transaction that is predetermined or guaranteed. Both the Quran and the Hadith emphasize the prohibition of riba and label it as a major sin. The Quran states in Surah Al-Baqarah (2:275):

“Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, ‘Trade is [just] like interest.’ But Allah has permitted trade and has forbidden interest.”

This verse clearly distinguishes between trade, which is permissible, and interest, which is prohibited. Islamic scholars interpret riba as usury or any unjust excess that is gained from lending money or assets.

is it haram
is it haram why

Reasons Behind the Prohibition

The prohibition of riba is based on several reasons that align with the principles of justice, fairness, and social welfare:

Exploitation and Injustice:

Islamic teachings emphasize the importance of fairness in economic transactions. Riba leads to the exploitation of the borrower and creates an unjust financial burden, especially on those in need.

Discourages Hoarding of Wealth:

Riba encourages individuals to hoard their wealth rather than investing or circulating it in the economy. Islam promotes the distribution of wealth and discourages accumulation without contributing to society.

Promotes Ethical and Productive Investments:

By prohibiting interest, Islam encourages ethical investments that have a real impact on the economy and society. It promotes productive investments that benefit individuals and communities.

is it haram
is it haram why


Receiving interest is considered haram in Islam due to its exploitative nature and violation of Islamic principles and values. The prohibition of riba aims to establish a just and fair economic system that promotes the welfare of individuals and society as a whole. Muslims are encouraged to explore alternative financial systems based on ethical principles, such as Islamic banking and finance, to ensure their financial transactions align with their religious beliefs.

Faqs about “is it haram to receive interest”

Is it haram to receive interest?

In Islam, receiving or paying interest is considered haram (forbidden). The Quran clearly prohibits usury and riba, which refers to the charging or receiving of interest. Muslims are encouraged to engage in halal (permissible) financial transactions that do not involve interest.

Why is receiving interest considered haram?

Receiving interest is considered haram in Islam because it is seen as exploiting the financial difficulties of others. It is viewed as unjust and promotes inequality. Islam encourages fair and ethical financial practices that promote mutual benefit and social justice.

Can Muslims save money in interest-based accounts?

No, it is not permissible for Muslims to save money in interest-based accounts. Muslims are advised to choose alternative Sharia-compliant financial products such as Islamic savings accounts or investment options that comply with ethical and Islamic principles.

What are the alternatives for Muslims to save money?

Muslims can save money in Islamic banks that offer Sharia-compliant savings accounts. These accounts follow Islamic principles and do not involve interest. Alternatively, Muslims can invest in halal businesses or assets, participate in profit-sharing arrangements, or donate to charitable causes.

Is it permissible to receive interest in cases of necessity?

In cases of extreme necessity, where a person’s basic needs are not met and they have no alternative options, scholars permit receiving interest as a last resort. However, this should be done with the intention of finding a way out of the necessity and should not be embraced as a regular practice.

Are there any exceptions to the prohibition of interest in Islam?

There are certain exceptions to the prohibition of interest in Islam. For example, engaging in interest-based transactions with non-Muslims in non-Muslim majority countries may be allowed under certain circumstances. Nevertheless, it is always recommended to seek guidance from qualified scholars when dealing with such situations.

What is the Islamic perspective on lending money?

Islam encourages lending money to those in need without expecting any interest in return. Doing so is considered a charitable act, and the borrower should only repay the principal amount. However, if both parties mutually agree to include an extra amount as a gesture of goodwill, it can be permissible as long as it is not named or treated as interest.

Can Muslims invest in businesses that involve interest?

Muslims are generally advised to avoid investing in businesses that involve interest. However, if the primary business activity is permissible in Islam and the interest component is not a significant part of the overall operations, some scholars may consider it permissible. It is essential to consult with knowledgeable scholars before making investment decisions.

How can Muslims plan for their financial future without interest?

Muslims can plan for their financial future by seeking halal investment opportunities, such as investing in businesses that comply with Islamic principles, real estate investments, or participating in profit-sharing ventures. They can also focus on increasing their knowledge of Islamic finance to make informed decisions about their finances.

Does the prohibition of interest apply to all forms of financial transactions?

The prohibition of interest in Islam primarily applies to lending and borrowing money. However, it is important to note that all financial transactions should adhere to the principles of fairness, transparency, and ethical conduct outlined in Islamic teachings. Muslims are encouraged to engage in transactions that benefit all parties involved without resorting to exploitation or injustice.


Surah Yaseen is a beautifully composed chapter in the Quran that holds immense spiritual importance for Muslims. It is often referred to as the "Heart of the Quran" due to its deep spiritual meanings and messages. The Surah starts with the Arabic letters "Ya Seen," and its verses are filled with divine wisdom and guidance for humanity.
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