Business profit from an interest loan

Walekumussalam,

In the situation described, if your mother is engaged in a lawful clothing business and has taken an interest-bearing loan for this business, then the sin of taking the interest-bearing loan and paying interest remains a separate matter; however, the profit earned through a lawful business using that loan will not itself be considered haram.

Therefore, if the buying and selling of clothes is carried out in a lawful manner, your mother does not deceive anyone, and she earns a lawful profit, then her business income will remain halal. Merely because the capital used in the business was obtained through an interest-bearing loan does not make the entire business profit haram.

However, taking an interest-bearing loan and paying interest is Islamically impermissible. Therefore, your mother should repent and seek Allah’s forgiveness for this matter and, as far as possible, avoid interest-bearing loans in the future. If it is possible to settle the existing loan, she should try to do so as soon as possible, and for future business needs she should seek interest-free or other Shariah-compliant means of financing.

Therefore, the family does not need to be distressed about the mother’s lawful business income merely because she is conducting the business using an interest-bearing loan. The profit from a lawful business remains halal, while the sin of taking an interest-bearing loan is a separate matter for which repentance is necessary.

References:

1. The Qur’an — Surah Al-Baqarah, 2:275

وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا

“And Allah has permitted trade and forbidden interest.”

2. The Qur’an — Surah Al-Baqarah, 2:278–279

يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِنْ كُنْتُمْ مُؤْمِنِينَ

“O believers! Fear Allah and give up what remains of interest, if you are truly believers.”

And Allah says:

فَإِنْ لَمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِنَ اللَّهِ وَرَسُولِهِ ۖ وَإِنْ تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَالِكُمْ

“If you do not, then be informed of a war from Allah and His Messenger. But if you repent, then you may retain your principal amounts.”

3. Sahih Muslim — Hadith 1598

It is narrated from Jabir رضي الله عنه that the Messenger of Allah ﷺ cursed the one who consumes interest, the one who pays it, the one who records it, and its two witnesses, and he said:

هُمْ سَوَاءٌ

“They are all alike in sin.”

4. Sahih al-Bukhari — Hadith 2766

It is narrated from Abu Hurairah رضي الله عنه that the Messenger of Allah ﷺ instructed the believers to avoid the seven destructive sins, among which he mentioned consuming interest (riba).

And Allah knows best.