The Ruling on Borrowing from the Bank and the Issue of Tawarruq

Question:
And I move on to another questioner. This questioner says: How do I take out a personal loan from the bank without falling into riba (usury or interest)? Guide me, I am in a state of confusion and I have not found anyone to lend to me. Some have said the method is to buy shares in any company you choose on installments, the administrative fees are low, the rate of murabahah (cost-plus sale) or the purchase of building materials or foodstuffs, and you ask the bank to sell that to you.

Answer:
It is not permissible to take a loan with interest as is the case with bank loans; riba (usury or interest) loans are not permissible. The Prophet (peace and blessings be upon him) said: And what is recommended is the good loan, where you ask for an amount to meet your need and then return it to them when you are able. This is the good loan, and the lender has a reward for it because he was generous with you and did you good. So you should be the best in repaying, and do not delay or postpone. As soon as you are able, you should hasten to fulfill the debt. And since there are no good loans available now, as far as we know, especially in the banks, you resort to the issue of tawarruq (a commodity sale used to obtain cash), which the majority of scholars have issued a ruling on. It is that you buy a present, existing commodity—such as rice, food, fabrics, or cars—you buy it, then take possession of it and move it from the seller’s place, from the bank or elsewhere. You sell it in another place to someone other than the creditor you borrowed from; you sell it to other people from the general public, and you benefit from its price. When the due date arrives, you pay the creditor his right. This provides a way out of riba (usury or interest). Yes.

The presenter:
May Allah reward you,