Fatwa ID: 87738
Title: Interest-based loan due to the economic circumstances associated with the coronavirus (COVID-19) pandemic
Category: Financial Transactions
Scholar: AMJA Resident Fatwa Committee
Date: 03/26/2020

Question

What is the ruling on taking an interest-based loan due to the economic circumstances associated with the coronavirus (COVID-19) pandemic?


Answer

In the name of Allah, the Most Merciful, the Most Beneficent

All praise belongs to Allah, and may prayers and peace be upon Allah’s Messenger, his family, his Companions, and those that followed them.

Interest-based loans are not permitted unless due to severe necessity. This has been determined by various assembly resolutions, beginning with the Assembly of Islamic Research in 1965, and others over the years. Widespread needs could be included in the category of those necessities that permit what is otherwise impermissible.

Applying that ruling to this situation depends on a very accurate description of the conditions. Are we facing a need to secure the necessities of life? Are we facing a need to a protect our fundamental wealth and prevent it from decline and collapse? If the situation is such, then the concession permits only what is required while at the same time striving to get rid of it. If the situation is not as such, then taking interest-based loans is prohibited as usual.

And Allah the Exalted knows best.