I was given an offer to get a loan for a builder, in return of which he would give me 6% of the loan amount.

The procedure of work is:

  • The builder would put his property in my name which I need to mortgage at the bank to take a riba based home loan which would be paid in EMIs.
  • The builder with this money will complete the remaining works of the same flat and look for a buyer.
  • When he gets a good deal, he would close the loan with pre-closure fees rather than riba and I will return the property to the builder.

Good things:

  1. I have shown all genuine documents to the bank for obtaining the loan.
  2. He will clear the loan as soon as he will sell off the property to someone, so he will pay early clearance fees to close the loan early and not interest.

Bad things:

  1. The person who wanted the loan had transferred money to our accounts which we paid as a down payment for the home loan to him and possibly he rotated the same money twice or thrice for showing full down payment transfer.
  2. The borrower will pay some installment at the beginning, which may have percentage of interest in it.
  3. I had to lie on one or two instances about things which are not related to the loan but asked during inquiry prior to giving the loan.


  1. Will this money that I obtained be considered as haram completely or partially?
  2. If this money is haram, will any profit that I obtain by investing it also be haram? I intend to give the basic haram money to needy people as and when they approach in my life.
  3. In case this money is haram for me can I still take the money and give charity without any hope of obtaining sawab out of it?
  • 1
    Whether it's halal or not, this whole setup just sounds like a scam waiting to happen. – goldPseudo Aug 29 '19 at 13:46
  • the bank has a mortgaged document of the property, hence no chance of non-repayment as the property is at stake, if the loan isnt returned the bank will auction the property. on the other hand the builder has got just 75% of the total value as loan. so he will loose too much in case he lets the property to go. the loan is also insured in case if anything happens to me or my job. – SMA Aug 31 '19 at 12:07
  • And you're sure this property is worth what you think it's worth? One common scam involves getting a false appraisal of a property before mortgaging it so you end up with a loan that's puts you in way more debt than the property was ever worth while the other guy pockets the difference. And I really wouldn't expect insurance to protect you if you explicitly lied while getting the loan in the first place. I'm just saying, if you're taking literally all of the financial risk (which it sounds like you're doing), it pays to do your homework and know exactly what you're getting into. – goldPseudo Aug 31 '19 at 16:21
  • oh yes. also the bank doesn't give away a loan just like that. – SMA Sep 2 '19 at 12:18

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