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.


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.

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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


Riba (money-lending on interest) is exact opposite of Sadaqa (charity). In Sadaqa one gives something and does not take anything in return. In Riba one does not "give" anything but takes from. So the true essence of Riba is ripping off others, it is injustice, it is zulm (opression).

Sadaqa is rewarded by Allah both in dunya (this life) and akhira (hereafter) while Riba causes punishment according to Quranic verses 30:39 and 2:275.

Surat Ar-Rūm (The Romans):

And whatever you give for interest to increase within the wealth of people will not increase with Allah . But what you give in zakah, desiring the countenance of Allah - those are the multipliers.


Surat Al-Baqarah (The Cow):

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. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah . But whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein.


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