Can You Give Interest Money to Charity in Islam?

Is Paying Interest Haram?

Interest in Islam is considered Haram (forbidden), meaning it must be avoided at all costs. Whilst it is relatively easy to avoid charging interest (simply by not asking for it), in today’s day and age, it is increasingly more difficult for Muslims to abstain from making interest payments. This is because things like loans and credit cards – which are typically seen as a necessity – automatically incur interest charges.

Most western banks also automatically apply interest payments on money in an account, meaning many Muslims accrue it without meaning to. In this instance, Muslims are left with interest money for which it is haram to spend on themselves, posing the question of what can be done to get rid of it and cleanse one’s wealth in a way that is halal.

Types of Interest

Riba (interest money) comes in two forms:

• Riba al-Nasiyah – interest that is accrued on delayed payments e.g. Person A lends Person B £100 which is to be paid over the course of 10 months. As a penalty of the payment being spread over 10 months, Person A demands that Person B pays back the initial £100, as well as £10 in interest for the delayed payments.
• Riba al-Fadl – Interest of excess that is paid in the form of objects, materials or goods, e.g. Person A lends Person B their car with half a tank of fuel on the condition Person B re-fills the car so that it is returned with the same amount of fuel it started with. Person B returns the car with a full tank of fuel.

Why Interest is Forbidden in Islam

“O you who have believed, do not consume interest, doubled and multiplied, but fear Allah so that you may be successful”. [Quran 3:130]

There are several reasons why interest money is considered haram, with the primary reason being that it is exploitative. When a person borrows something from someone else, they are doing so because they are in need, and therefore if they cannot afford something in the first instance, they (in theory) cannot afford to pay back even more than they have borrowed. Oftentimes, the person in the privileged position profits from the person in need when they charge interest, and this disliked by Allah.

Given the fact that much of Islam is embedded in charity, it is greedy for a person to charge interest.

Is Interest Ever Halal?

As mentioned previously, there are instances in which interest money cannot be avoided, and whilst this is recognised, interest money is still not halal. That being said, the attitude towards interest money will depend on the school of thought you follow.

For example, some Muslims take Riba being haram literally, and as such, will not own a home as mortgages are often paid back with interest. In the same manner, they will not take out loans or have credit cards because of the interest charges on defaulted payments.

In contrast, other Muslims will seek to own a home, and many have credit cards and take out loans as a safety net in case of an emergency.

Can a Muslim take interest from a bank?

There are ways to obtain an interest-free mortgage and not incur interest on money in a bank account in the UK by banking with an Islamic bank. It is forbidden for a Muslim to take interest from a bank, however, Islamic banks such as the Al Rayan and United Banks give out Muslim interest free loans.

Can You Donate Interest Money in Islam

“Whatever loans you give, only seeking interest at the expense of people’s wealth will not increase with Allah. But whatever charity you give, only seeking the pleasure of Allah – it is they whose reward will be multiplied”. [Quran 30:39]

In the instance you do incur interest money unintentionally, there is only one way you can spend it. For those wondering can you give interest money to charity in Islam, the answer is yes, but only as a general donation. Whilst Zakat is a type of charity, it is not permissible to use interest money for Zakat. This is because when a person gives Zakat, they are rewarded for their generosity, but when interest money is spent, no rewards are to be expected because it is haram in its nature and should only be spent to cleanse one’s wealth.

What should a Muslim do with interest money?

In summary. if you have accrued interest money, you may make a general donation with it. If you do not want to make a general donation with it, you may buy essential supplies such as water, food, medical aid kits or clothes for a person in need instead. You cannot spend interest money on building a mosque or buying a Qur’an.

Can You Receive Interest Money?

In the same way that it is considered haram for a person to request interest, it is haram to receive it unless they have received it through charity. For example, a person in need who receives aid in the form of interest money will not be punished for it since the money will have been cleansed.

The Punishment for Paying Interest in Islam

Allah mentions in the Quran:

“Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah . But whoever returns to [dealing in interest or usury] – those are the companions of the Fire; they will abide eternally therein”.. [Quran 2:275]

What’s more, the Quran says that Allah will remove all blessings that come from interest.

Donate Your Interest Money

Cleanse your wealth and consider donating your interest money to Orphans in Need today. Your interest money will be distributed amongst those in need, helping make a change around the world.