The Ruling on Long-Term Financing from Companies and Banks with an Increase

The questioner:
The third question, if you please. But the financing that companies do, which is for twenty or twenty-five years. What is its ruling, O Shaykh? It is four thousand or five thousand over twenty years. Some companies and some banks. I mean, they give, for example, a million, like the housing method, and they take a million for it, and I don’t know, it is long-term. What is its ruling, O Shaykh, may Allah preserve you?

The Shaykh:
I do not know what this method is, but is it a loan where they lend you a loan and you repay it over multiple years?

The questioner:
Financing, O Shaykh, a million, and they take, I mean, seven hundred thousand or eight hundred thousand for it.

The Shaykh:
This is a loan; this is riba (usury or interest). It is not permissible for them to take an increase. If they lend you and take back the amount they lent you, there is no harm. But if they take an increase on the loan, this is riba. Every loan that brings a benefit is riba. This is what the scholars agree upon.

The presenter:
Thank you,