I know it means interest. I'm a 16 year old girl revert and I don't quite understand the laws of riba. For example, are phone contracts haram? Are scholarships haram? Is insurance haram?

How can I avoid riba in a country like Canada, USA, etc? I want to know ahead of time so inshAllah I don't commit this major sin once I have moved out and start a family inshAllah.

2 Answers 2


Interest and Insurance are both Haraam, literally interest means 'extra', but in islamic terms it is the the additional amount of something you get in return after giving someone that particular thing, eg you give 50 cents to someone and get back 60 cents, the 10 cents will be riba/usury/interest, the same applies to gold, silver, wheat, dates, barley if you give lets say 1kg and receive a half more then the half will be Riba.

Kindly visit these links for more info on Interest http://www.askimam.org/public/question_detail/27382 http://www.askimam.org/public/question_detail/26962


When one reads the Koranic references to riba, particularly Koran al-Baqarah 275-280, there is usually a reference to injustice, exploitation (ie "redoubling") and the benefit of charity. Riba embodies an element of injustice and unfairness, and this is consistent with the emphasis in Islam on social justice. An interest charge in a competitive market representing a reasonable amount for time value, illiquidity, and credit risk cannot be regarded as exploitation.

The mistake is committed by those who ignore the fact that money has time value - an accepted principle of modern finance. This value requires compensation - interest. Many conventional Islamic scholars have asserted that money is just a medium of exchange. But it is more than this; it also represents productive capital. Money can be used to purchase productive assets such as real estate and capital goods that earn a return.

This view is at variance with much of the conventional Islamic approach (but not all - see the fatwa of mufti Tantawi on bank interest, Al Azhar University), but it would not be the first time the conventional view is wrong.

Professor Farooq in this article makes a good case that riba was really the oppressive increasing ('redoubling) of outstanding unpaid debt by moneylenders on poor debtors. The original markup was not riba. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1412753

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