Banking: Paying Back More Than the Original Housing Loan: Is It Sharʿī?
Practical Laws of Islam as per the teachings of Imam Khamenei
Banking: Paying Back More Than the Original Housing Loan: Is It Sharʿī?
English:
Question #1897:
The housing bank in the Islamic Republic grants loans to people to buy, build, or refurbish their own property. Having bought the property or refurbished it, the bank retrieves the loan from the borrower by installments. However, the total sum paid back will be larger than the one that had been granted in the first instance. Is there any legal justification for the payment of the extra amount over and above the amount of the loan?
Answer #1897:
It is known that the banks do not grant the money by way of loan, rather it is in accordance with a valid and shar‘ī contract, such as partnership, ju‘ālah, rent, or the like. However, there is no harm in these transactions provided that the shar‘ī provisions therein are respected.
-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Banking