# How is rent different from interest? [duplicate]

Say I have \$100,000 cash and a house worth \$100,000. I loan Sam the \$100,000 cash for 10% of 100,000 (\$1000) interest each month. Also, I rent out my house to Kate for \$1000 rent per month.

If Sam fails to pay me the monthly amount, the amount he owes me will increase the next month. Similarly, if Kate fails to pay me the monthly amount, the amount she owes me will increase the next month.

As the value of my house increases, I can increase the rent (by a certain % depending on the rent rates in the area). I can also increase the % of interest on my loan to Sam.

If both of them consistently fail to pay the monthly amount, I have the right to take my house back from Kate and my cash from Sam.

Say Sam lost the money and he is unable to payback immediately, then he is entitled to a bigger penalty. Also, Kate burnt down my house, and cannot return my house right away, then she is entitled to a bigger penalty as well.

How is rent different from interest? I do not understand that why Rent is halal and interest is not when they seem to be the same ideas.

• Which side are you on? Buyer or seller?
– user12537
Nov 30 '15 at 21:04
• From my experience, what a person pays when he/she fails to pay the rent on time is a fixed amount, not a percentage. Plus, the 10% interest you are charging Sam won't always be \$1000 every month, it is 10% of his remaining loan. There is a HUGE difference between Rent and Interest. Let me know if you need more examples. Jan 29 '16 at 20:18
• A simple google search would have answered this question really. first off: when I buy something or pay something off, no interest is ever involved. At the end of the day if Sam pays back 100% of the money and Kate pays n*\$1000 where n=the number of months unpaid. Neither of them are paying interest. The result of Kate burning the house and paying you back for it is a seperate issue entirely Aug 5 '16 at 8:37