What Should I Do with Interest I Didn’t Ask For?

Shafi'i Fiqh

Answered by Shaykh Irshaad Sedick

Question

My wife and I lent a small amount of money to a friend of hers with the expectation that she would pay that same amount back the next day. She was two days late, but we received the principal alongside an additional 10% and a food item as an apology for late payment. We did not ask anything back but the principal. Does the money and/or the food qualify as haram riba? If my wife’s friend won’t accept the money and item back, what can be done with it?

Answer

In the Name of Allah, Most Merciful and Compassionate. May Allah guide us to that which pleases Him, Amin.

If the person in question had the habit of giving you gifts before the loan, such as if she was a friend or relative of yours who gave gifts from time to time, etc., then there is nothing wrong with accepting the gift because it had nothing to do with the loan.

If the sister had no such habit, it is not permissible for you to accept it because it is a benefit taken on a loan, and if you accept it, you may fall into riba (usury and interest). She may have given it because of the late repayment, which is also riba. The fundamental legal maxim regarding loans is that: “Every loan which brings a benefit is riba.”

Gift or Interest

Yahya Ibn Abi Ishaq said: “I asked Anas Ibn Malik, ‘What if a man gives his brother a loan, then (the borrower) gives him a gift?’ The Messenger of Allah (Allah bless him and give him peace) said: ‘If any one of you borrows something then he gives (the lender) a gift or gives him a ride on his riding-beast, he should not accept the gift or the ride unless they used to treat each other in that manner beforehand.’” [Ibn Maja]

Ibn Sirin narrated that ‘Umar (Allah be pleased with him) lent Ubayy Ibn Ka’b (Allah be pleased with him) ten thousand dirhams, and Ubayy Ibn Ka’b gave him a gift of some fruit from his land, but he returned that to him refusing to accept it.

Ubayy came to him and said: “The people of Madina know that I grow some of the best fruit, and I have no need of it, so why did you refuse my gift?” Later he sent him (some fruit), and he (‘Umar) accepted it.

Ibn Al-Qayyim (Allah have mercy on him) said: “Umar refused it because he thought the gift was because of the loan. When he realized that it was not because of the loan, he accepted it.”

Abu Burdah said: “I came to Madina and met ‘Abd-Allah ibn Salam (Allah be pleased with him). He said to me: ‘You are in a country where the practice of riba is prevalent; so if somebody owes you something and he sends you a present of a load of chopped straw or a load of barley or a load of fodder, then do not take it, as it is riba.’”

Disbursing Unlawful Income

The general rule that applies to any form of unlawful funds is as follows:

  1. Where the rightful owner is known, it must be returned to the rightful owner.
  2. Where the rightful owner is not known [or if they refuse], the funds must be disposed of in one of two ways:
    a) it must either be given towards a charitable cause that benefits the public at large, such as public hospitals, schools, or mosques
    b) or it should be given in charity to a person who is entitled by his need to receive charity. [Karaan, Disposal of Riba (Fatwa issued by the MJC)]

I pray this is of benefit.

[Shaykh] Irshaad Sedick
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar, Shaykh Taha Karaan. 

Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Mawlana Yusuf Karaan, and Mawlana Abdul Hafeez Makki, among others.

He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has served as the Director of the Discover Islam Centre and Al Jeem Foundation. For the last five years till present, he has served as the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.

Shaykh Irshaad has thirteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic online learning and media platform called ‘Isnad Academy’ and pursuing his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy living and fitness.