The creditor stipulating a late payment penalty on the debtor
Machine translationRead the Arabic original
Question:
He says: May Allah preserve you, is it permissible for the creditor to stipulate a late payment penalty on the debtor and have him pay it to him?
Answer:
It is not permissible to increase the debt on the debtor. This is the riba (usury or interest) of the pre-Islamic age of ignorance. This is riba al-nasi'ah (usury of deferment). It is not permissible. If the debtor is well-off, he is required to settle it. If he is in difficulty, he must be given time until he is able to pay, and the debt is not to be increased on him. Yes.
He says: May Allah preserve you, is it permissible for the creditor to stipulate a late payment penalty on the debtor and have him pay it to him?
Answer:
It is not permissible to increase the debt on the debtor. This is the riba (usury or interest) of the pre-Islamic age of ignorance. This is riba al-nasi'ah (usury of deferment). It is not permissible. If the debtor is well-off, he is required to settle it. If he is in difficulty, he must be given time until he is able to pay, and the debt is not to be increased on him. Yes.
Source
قناة «العلامة الدكتور صالح الفوزان»، محاضرات في العقيدة والدعوة-60-أسباب محبة الله للعبد|صالح الفوزان|العام|كبار العلماء — youtube.com (1:14:28)
The Arabic text is a machine transcription of the audio recording.