Title: Can I apply for the loan for doing my own business although I can do business with my own investment but due to government obligations?

Question: Can I apply for the loan for doing my own business although I can do business with my own investment but due to government obligations?

Answer ID: 155774Posted on: Aug 30, 2020

Bismillah hir-Rahman nir-Rahim !

(Fatwa: 169/131/L=2/1439)

According to the holy Quran, loan (interest based) is haram. The Holy Quran and Hadith sternly warn against it. The Holy Prophet Muhammad (may peace and blessings of Allah be upon him) has cursed those who take interest, pay it, write it, and bear witness to it. (Mishkat: 244). Thus, it is not lawful to take loan for business. However, if a man has some amount and he can do business with it but he could be questioned by income tax department due to which it is feared that a huge amount of halal income shall go to penalty, and if such a person takes loan as per his need then it is allowable but it should be out of compulsion and only as much necessary with the intention to save one’s halal income and it should be paid off as soon as possible.