Ruling on demanding an increase in a loan used for trade
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Question: A man borrowed a sum of money from me, approximately fifty thousand riyals, three years ago, with the agreement that he would repay it within six months. However, he kept the money with him longer than that and has been trading with it until now. Is it permissible for me to demand an increase over my original principal, or not?
Answer: You are entitled only to your principal, and it is not permissible for you to demand an increase, because that is riba. However, if he gives you an increase along with your right, as a voluntary gift from him—without your request or any compulsion—then that is better for him and more virtuous in his regard, in accordance with the authentic hadith, which is the saying of the Prophet (peace and blessings be upon him):Sunan Abi Dawud 3346Sahih (Al-Albani). And because that serves as a reward to you for your kindness, and the Prophet (peace and blessings be upon him) said: Sunan Abi Dawud 1672Sahih (Al-Albani).
Answer: You are entitled only to your principal, and it is not permissible for you to demand an increase, because that is riba. However, if he gives you an increase along with your right, as a voluntary gift from him—without your request or any compulsion—then that is better for him and more virtuous in his regard, in accordance with the authentic hadith, which is the saying of the Prophet (peace and blessings be upon him):
for the best person is he who discharges his debt in the best manner
إن خيار الناس أحسنهم قضاءif anyone does you a kindness, recompense him; but if you have not the means to do so, pray for him until you feel that you have compensated him.
من أتى إليكم معروفًا فكافئوه، فإن لم تجدوا ما تكافئونه، فادعوا له حتى تروا أنكم كافأتموه
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.