Ruling on taking a bank loan to avoid renting

15-2-2023 | IslamWeb

Question:

Assalaamualaikum,One of my relative is planning to buy a house and for which he is taking a bank loan. In order to save him from some part of interest I told him that I will be giving him some amount from my side for buying the house, this way the amount of bank loan that he will be taking will be reduced and hence the interest. Is this correct from my side to save him from at least some part of interest or am I sinning by indirectly helping him in taking a bank loan ?

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Answer:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.

Your relative should know that it is impermissible to take a usurious loan to own a home as long as he is able to rent a house.

If renting is not possible and it incurs unbearable hardship, and this hardship can only be removed by the usurious loan. In that case, it is permissible to take a loan on the basis that necessities permit the prohibitions.

As for what you intend to do, if your relative takes the prohibited loan, and you want to reduce the amount of the loan and the interest on it, then that is permissible.

Allah knows best.