Assalam alaikum wa rahmat Allahi wa barakatuh,

Does the need to repay a loan by borrowing money with interest assume the status of an exigent need since I am unable to pay back the loan on time?

In the Name of Allah, the Beneficent, the Merciful,

All praise is due to Allah, and may peace and blessing be upon the Messenger of Allah, upon his household, his companions and those who have followed him. To proceed:

Riba (usury/interest) is a heinous crime, and it has been absolutely prohibited in all divinely-revealed laws. Never has it been permitted in any of the divine legislation revealed to any of the prophets! Lending money with interest can never be mandated by necessity because such a situation is inconceivable [to be financially solvent and in dire need at the same time is an oxymoron]. The sin for borrowing money with interest, on the other hand, may be lifted by exigent need, and every Muslim is responsible before Allah for judging the extent of his need. In your situation in particular, you must do everything you can to repay your debt, to get the lender to wait, to find someone to pay it off for you as a “qard hasan,” or benevolent loan [without interest or profit], or to sell something you could do without in order to repay the debt. If you are incapable of doing all of that, you are being threatened with imprisonment by the lender and you find no other way to get around that other than to borrow money at interest, then perhaps this would be a case of exigent need which I hope would be included under the Pardon of Allah (Mighty & Majestic). Fervently beg Allah for forgiveness and supplicate Him in the last third of the night, for that is the path out of distress and the way to ask for mercy.

We ask Allah to suffice you with that which is permissible of that which is prohibited, with obedience to Him of disobedience and sin, and by His Bounty of anyone beside Him.

And Allah Almighty is the Most High, and He knows best.