Riba
Riba means an increase. In Islamic law it means an unlawful gain taken from lending or from an unequal exchange - interest, most commonly. The Qur'an forbids it in the strongest terms it uses for any financial matter, while permitting trade and profit.
The opposite arrangement, lending without any increase, is Qard Hasan.
What the Word Means
The root behind riba means to increase, to grow, to swell.
That is the whole word. Not "exploitation", not "usury" in the sense of an unfair rate - simply increase. Islamic law takes a plain word for growth and makes it the name of something forbidden.
Which means the question is never whether an increase is too large. It is whether an increase was taken from the wrong kind of transaction at all.
The Verse That Turns the Word Around
There is a sentence in the Qur'an that does something in Arabic which no translation quite carries.
Allah destroys riba, and causes the charities to grow (Qur'an 2:276).
The word used for "causes to grow" is yurbi - from the very same root as riba. So the verse says, in effect: the thing you called increase, He wipes out; and charity, which looks to you like a decrease, He increases.
The commentator Mufti Muhammad Shafi gives an image for it. Wealth built on riba does grow - the way a body swells. Swelling is an increase in the body, and no sensible person wants it, because of what it signals.
A related verse makes the same contrast directly: what you give as riba, so that it may grow through other people's wealth, does not grow with Allah; and what you give in Zakat, desiring His countenance - those are the ones who are multiplied (Qur'an 30:39).
Riba and charity are placed opposite one another, deliberately and more than once. For a glossary mostly concerned with giving, that is the point worth holding on to.
The Two Kinds
Scholars divide riba in two.
Riba on a loan. The original and most serious form: lending money or goods and taking back more than was given. Pre-Islamic practice in Arabia went further - when a debtor could not pay, the debt was doubled and the time extended, and doubled again. This is what the Qur'an addresses most directly, and it is what interest means in ordinary modern use.
Riba in exchange. The Prophet Muhammad ﷺ named six things - gold, silver, wheat, barley, dates and salt - and taught that when like is exchanged for like, it must be equal and hand to hand. Swapping a measure of good dates for two measures of poor ones is riba, even though both parties agreed. Scholars have long discussed what else falls under this, and the reasoning behind it is why currency exchange has its own rules.
How Seriously It Is Taken
More seriously than any other financial matter in the Qur'an.
After instructing believers to give up what remains of riba, the verse continues: if you do not, then be warned of war from Allah and His Messenger. And then, immediately: but if you repent, you may have your principal - you do no wrong, and you are not wronged (Qur'an 2:278–279).
Nowhere else is a financial matter put in those terms. Note also what the same passage protects: the lender keeps what they actually lent. The prohibition is on the increase, not on the capital.
The Prophet ﷺ cursed the one who consumes riba, the one who pays it, the one who records it, and the two who witness it, and said they are all alike (reported in Sahih Muslim).
And in his farewell sermon he announced that all riba of the age before Islam was cancelled - and that the first he was cancelling was the riba owed to his own uncle, Abbas. He began with his own family.
Trade Is Not Riba
This needs saying plainly, because the two get confused.
The Qur'an records the objection of those who said trade is just like riba, and answers it directly: Allah has permitted trade and forbidden riba (Qur'an 2:275).
Profit from buying and selling is lawful. Profit from a business you own is lawful. Rent on property is lawful. Investment where you share the risk is lawful. What is forbidden is a guaranteed increase on money lent, where the lender carries none of the risk and the borrower carries all of it.
That distinction - who carries the risk - is the thread running through the whole subject.
Living With It in Britain
An honest word, because the gap between the rule and daily life here is real.
British Muslims hold current accounts that pay interest, are offered mortgages that charge it, take student loans, and have pensions invested in funds that deal in it. Avoiding every trace is extremely difficult, and pretending otherwise helps nobody.
Three things are reasonably settled.
Interest you receive should not be kept. The mainstream position is that it is not yours to benefit from. Give it away to people in need, without expecting reward for it - the reward belongs to clean wealth.
It does not count as your charity. Disposing of unlawful gain and giving Sadaqah are different acts. More on this in the questions below.
The principal is yours. Both when you lend and when you borrow, what is owed is the amount itself.
Beyond that, matters get genuinely disputed, and anyone with a decision to make should ask a scholar rather than a website - including this one.
Frequently Asked Questions
Give it away. Most scholars hold that it is not lawful for you to use, but that destroying it serves nobody, so it should go to people in need. What you cannot do is count it as a good deed on your part, or keep the benefit indirectly by using it to pay bills you would otherwise have paid yourself.
Many charities do accept it, usually asking donors to flag it so it is directed to general relief for the poor rather than to anything else. It does not count as your Sadaqah or your Zakat, because those are given from lawful wealth and carry reward, while this is disposal of something you should not hold. Tell a charity what the money is, and ask how they handle it.
Scholars differ, and sharply. The majority position is that an interest-bearing mortgage is not permitted. A minority of contemporary scholars, including a European fatwa body, have allowed it for Muslims living as a minority who cannot otherwise house their families, treating it as a case of genuine necessity. That view is contested by many. Islamic home purchase plans are available in Britain and avoid the question. This is a decision for you and a scholar, not for a glossary.
Unsettled, and worth asking about rather than assuming. These loans behave unusually: repayment depends on income, nothing is owed below a threshold, the balance is written off after a set period, and the charge is linked to inflation rather than set as conventional interest. Some scholars have argued this makes them closer to a tax on earnings than to a loan with riba. Others treat them as a loan with an increase and so impermissible. Nobody should take a position from a web page.
Debts generally reduce the wealth Zakat is calculated on, and the kind of debt does not change that. Someone in debt they cannot repay may also qualify to receive Zakat under the category of Gharimin, where the question of whether Zakat may clear the interest portion as well as the principal is covered.
How Seriously It Is Taken
More seriously than any other financial matter in the Qur'an.
After instructing believers to give up what remains of riba, the verse continues: if you do not, then be warned of war from Allah and His Messenger. And then, immediately: but if you repent, you may have your principal - you do no wrong, and you are not wronged (Qur'an 2:278–279).
Nowhere else is a financial matter put in those terms. Note also what the same passage protects: the lender keeps what they actually lent. The prohibition is on the increase, not on the capital.
The Prophet ﷺ cursed the one who consumes riba, the one who pays it, the one who records it, and the two who witness it, and said they are all alike (reported in Sahih Muslim).
And in his farewell sermon he announced that all riba of the age before Islam was cancelled - and that the first he was cancelling was the riba owed to his own uncle, Abbas. He began with his own family.
This needs saying plainly, because the two get confused.
The Qur'an records the objection of those who said trade is just like riba, and answers it directly: Allah has permitted trade and forbidden riba (Qur'an 2:275).
Profit from buying and selling is lawful. Profit from a business you own is lawful. Rent on property is lawful. Investment where you share the risk is lawful. What is forbidden is a guaranteed increase on money lent, where the lender carries none of the risk and the borrower carries all of it.
That distinction - who carries the risk - is the thread running through the whole subject.
An honest word, because the gap between the rule and daily life here is real.
British Muslims hold current accounts that pay interest, are offered mortgages that charge it, take student loans, and have pensions invested in funds that deal in it. Avoiding every trace is extremely difficult, and pretending otherwise helps nobody.
Three things are reasonably settled.
Interest you receive should not be kept. The mainstream position is that it is not yours to benefit from. Give it away to people in need, without expecting reward for it - the reward belongs to clean wealth.
It does not count as your charity. Disposing of unlawful gain and giving Sadaqah are different acts. More on this in the questions below.
The principal is yours. Both when you lend and when you borrow, what is owed is the amount itself.
Beyond that, matters get genuinely disputed, and anyone with a decision to make should ask a scholar rather than a website - including this one.
Frequently Asked Questions
Give it away. Most scholars hold that it is not lawful for you to use, but that destroying it serves nobody, so it should go to people in need. What you cannot do is count it as a good deed on your part, or keep the benefit indirectly by using it to pay bills you would otherwise have paid yourself.
Many charities do accept it, usually asking donors to flag it so it is directed to general relief for the poor rather than to anything else. It does not count as your Sadaqah or your Zakat, because those are given from lawful wealth and carry reward, while this is disposal of something you should not hold. Tell a charity what the money is, and ask how they handle it.
Scholars differ, and sharply. The majority position is that an interest-bearing mortgage is not permitted. A minority of contemporary scholars, including a European fatwa body, have allowed it for Muslims living as a minority who cannot otherwise house their families, treating it as a case of genuine necessity. That view is contested by many. Islamic home purchase plans are available in Britain and avoid the question. This is a decision for you and a scholar, not for a glossary.
Unsettled, and worth asking about rather than assuming. These loans behave unusually: repayment depends on income, nothing is owed below a threshold, the balance is written off after a set period, and the charge is linked to inflation rather than set as conventional interest. Some scholars have argued this makes them closer to a tax on earnings than to a loan with riba. Others treat them as a loan with an increase and so impermissible. Nobody should take a position from a web page.
Debts generally reduce the wealth Zakat is calculated on, and the kind of debt does not change that. Someone in debt they cannot repay may also qualify to receive Zakat under the category of Gharimin, where the question of whether Zakat may clear the interest portion as well as the principal is covered.