Questions and Answers

Purchasing a Vehicle from a Bank Loan

Question: It is understood that Riba transactions are forbidden in Islam. However if one had purchased a vehicle through the bank via a loan and is already involved in such a transaction, what would be the best solution to this problem, seeing that the loan has existed for one year and will continue for 3-4 more years? Similarly what would be the advice for one who had entered a mortgage agreement for a house and then after some years, converted to Islam and now understand the laws pertaining to Riba?

Answer: With respect to the first case, seeing that he has already entered such a transaction, there isn't much he can do, since he can be penalised for breaching the agreement after he has willingly signed it. As such, he should try to see if he can pay it as fast as possible. In this regard, he can try to see if he can get a goodly loan (interest free) from someone and use it to pay the bank so that he can get out of the Riba system. If this is not possible then he will have to pay the loan in accordance to the agreement which he has entered. While doing so, he should constantly seek the forgiveness from Allah for what has occurred.

The response to the second case will be like the first. The person will try to pay out the loan as fast as he can, and if this is not possible, then he will have to fulfill the terms of the agreement which he has entered. While doing so, he should continue to seek forgiveness from Allah.

And Allah knows best.
Mufti Waseem Khan