Islam does not encourage taking loans. This is because it may make a man dishonest, and lose his honour. Also, the one who owes a debt shall not be admitted into paradise until he has paid his debt. The hadith reported by Imam An-Nasâ’i reported that Mohamed ibn Abdullah ibn Jahsh said: the Messenger of Allah (PBUH), was sitting by the graves, then he raised his head to heavens, then he lowered his gaze, and then he put his hand on his forehead and said: “Glory be to Allah! Glory be to Allah! What a stern revelation.” He said: we knew but kept silent. The following day I asked the Messenger of Allah, peace and blessings of Allah be upon him, about the stern revelation.
He said: “it is revealed about the debt. By Him in Whose Hands is my soul if a man was killed on the cause of Allah, then he lived again and was killed again, then he lived again and was killed again while he has unpaid debt he will not enter Paradise unless his debt is paid off.”
Haven noted the weight of taking a loan, we still keep in mind that no man is an Island. And sometimes, we may be forced by circumstances. As such, Islam has given some guidelines as to how a debt may be given, and the manner and behaviour of both parties involved in order to strengthen, and not ruin one’s relations.
1. Make it official: When borrowing from someone or when lending to someone, always make sure you write it down, and both parties sign. It is also very important to have a witness or two present. The Quran says in Baqarah verse no. 282:
“O you who believe! When you contract a debt for a fixed period, write it down. Let a scribe write it down in justice between you. Let not the scribe refuse to write as Allah has taught him, so let him write. Let him (the debtor) who incurs the liability dictate, and he must fear Allah, his Lord, and diminish not anything of what he owes. But if the debtor is of poor understanding, or weak, or is unable himself to dictate, then let his guardian dictate in justice. And get two witnesses out of your own men. And if there are not two men (available), then a man and two women, such as you agree for witnesses, so that if one of them (two women) errs, the other can remind her. And the witnesses should not refuse when they are called on (for evidence). You should not become weary to write it (your contract), whether it be small or big, for its fixed term, that is more just with Allah; more solid as evidence, and more convenient to prevent doubts among yourselves, save when it is a present trade which you carry out on the spot among yourselves, then there is no sin on you if you do not write it down. But take witnesses whenever you make a commercial contract. Let neither scribe nor witness suffer any harm, but if you do (such harm), it would be wickedness in you. So be afraid of Allah; and Allah teaches you. And Allah is the All-Knower of each and everything.
2. Be careful who you borrow from: This is key. Although sometimes we find ourselves in strangulating situations, always bear in mind that the absolute Sustainer is Allah. Do not be pushed to the extent of borrowing money that you know is earned in a haram way. Remember that any money that is not halal is devoid of the barakah of Allah. But if you have tried all possible means and it is your only option, then make your intention to Allah and He is the All Knowing of what’s in the hearts.
3. Do not succumb to Riba: Riba (interest) is absolutely and irrefutably haram. It incurs the anger of Allah and no situation is worth it. Avoid borrowing from people who would require interest at the end. Remember that when it comes to Riba, both the one paying it and the one receiving it earn the sin. It is reported by Jabir : The Prophet (pbuh) cursed the receiver and the payer of interest, the one who records it and the two witnesses to the transaction and said: “They are all alike [in guilt].” (Muslim)
The Quran says: “Allāh has allowed trading and forbidden usury” (2:275).
4. Pay on time: The best debtor is the one who pays his debt on time. And the best lender is the one who forgets what he is owed. Look at what the narration says: Abu Qatadah reported: I heard the Holy Prophet (SWAS)say: Who so ever gives respite to a debtor or grants him remission, Allah will save him from the calamities of the Resurrection Day. – (Muslim)
5. Make dua for one another: We must always remember Allah in whatever situation we find ourselves. When the debt is finally settled, both parties may make dua for each other.
Here’s a dua to the one who has given the debt: Baarakallahu laka fee ‘ahlika wa maalika ( May Allah bless you in your family aand your property)
A lender may also make the following dua when he has been paid:
Baarakallaahu laka fee ‘ahlika wa maalika, ‘nnamaa jazaa’us-salafil-hamdu wal’adaa’ (May Allah bless you and your family and your wealth, surely the reward for a loan is praise and returning (what is borrowed).
I shall conclude with a beautiful dua In sha Allah :
Allahummak-finee bihalaalika ‘an haraamika wa ‘aghninee bifadhlika ‘amman siwaaka – O Allah, suffice me with what You have allowed instead of what You have forbidden, and make me independent of all others besides you.