Islamic Finance

  • Can You Take Bank Interest If You Are Already Paying Interest on a Loan?

    Can You Take Bank Interest If You Are Already Paying Interest on a Loan? QuestionInterest vs interestAre we allowed to take interest if we are paying for one.Example i have car loan and they are charging me 100$ interest for every month and i am also getting less than $100 or equal to $100 for…

  • Is Profit From Selling a House Purchased With a Conventional Mortgage Haram?

    Is Profit from Selling a House Purchased with a Conventional Mortgage Haram? Questionas salamu alaykum Sheikh. I have a question regarding profit I made on my house. I bought my house on a traditional Mortage. I bought it at $485,000 and sold it at $574,000 after living it in for 2 years. Is this profit…

  • What Debts Can Be Deducted When Calculating Zakat? Are Credit Cards, Student Loans, and Monthly Payments Deductible?

    What Debts Can Be Deducted When Calculating Zakat? Are Credit Cards, Student Loans, and Monthly Payments Deductible? QuestionMy third question is about the deductions around Zakat calculations. I read one of your previous posts but just want to confirm. It is immediate debts that can be deducted from wealth when calculating zakat? I understand using…

  • Who Is Required to Pay Zakat al Mal? Does Having Less Than the Nisab Mean Zakat Is Not Obligatory?

    Who Is Required to Pay Zakat al Mal? Does Having Less Than the Nisab Mean Zakat Is Not Obligatory? QuestionMy first question is about who qualifies to pay zakat al mal. I am aware that there is the threshold of Nisab that correlates to the price of gold or silver. The current threshold equals around…

  • How Is Zakat Calculated If You Have a Personal Loan Used for Business?

    How Is Zakat Calculated If You Have a Personal Loan Used for Business? QuestionWhat’s the ruling on your zakat if you have a loan on your name. example your friend lent you 20,000 dollars and your using it for your business, if my understanding is right your total zakat is only due on the amount…

  • Is a “Halal Mortgage” Valid If the Contract Clearly Lists Interest and a Standard Amortization Schedule?

    Is a “Halal Mortgage” Valid If the Contract Clearly Lists Interest and a Standard Amortization Schedule? Question Assalamu Alaikum, I am seeking guidance on a residential financing agreement I am entering into. The provider marketed this as a “Halal” financing option (Tjara), but the commitment documents I received from the processing company (Radius Financial) include…

  • Is Zakat Obligatory If Someone Has Debt Such as Student Loans or a Mortgage?

    Is Zakat Obligatory If Someone Has Debt Such as Student Loans or a Mortgage? Question Salam! (Asking on behalf of my wife) she was discussing the zakat al Fitr with people & some people have different opinions. Some people are saying that you are not required to give charity on anything including the gold sitting…

  • Is Day Trading Through Online Prop Firms Permissible in Islam?

    Is Day Trading Through Online Prop Firms Permissible in Islam? Question Salam alaikum sheikh. I wanted to ask for a ruling regarding day trading through online proprietary trading firms (“prop firms”). Based on your ruling that cash equity trading without margin is permissible, I wanted to ask whether trading through these firms affects the permissibility.…

  • Can I Count Money I Owe My Friend Toward My Zakat?

    Can I Count Money I Owe My Friend Toward My Zakat? Question My friend paid $4,000 for something I wanted… when we came home I offered to pay him the money but he said it’s okay leave it for now and I’ll get the money from you later….I pay my zaakat during Ramadan so, do…

  • Should I Remove the 2.3 Percent Interest from My RRSP and Then Switch to a Halal Provider?

    Should I Remove the 2.3 Percent Interest from My RRSP and Then Switch to a Halal Provider? Question So, the RBC, the 2.3 interest reinvested, calculate exactly that amount and those 2.3 interest that they invested before, giving it for charity, and the rest is good. However, we encourage you to switch your RRSPs to…

  • Is It Permissible to Sell Clothing with Images of Female Celebrities Who Promote Indecency?

    Is It Permissible to Sell Clothing with Images of Female Celebrities Who Promote Indecency? QuestionI buy and sell various items. I found a Dolly Parton shirt with her picture showing her face, hair, and neck. Since she is a music celebrity and such figures often promote indecency and sinful behavior, is it permissible to sell…

  • Is Zakat Obligatory on Gold Received for Personal Use (Wedding Jewelry)?

    Is Zakat Obligatory on Gold Received for Personal Use (Wedding Jewelry)? QuestionI received 100 grams of gold from my in-laws’ house and my father’s house for my wedding, alhamdulillah. I received this gold for my own personal use. Is it obligatory to pay zakat on it, since the gold is not for storage or trade?…

  • Rulings on Common Legal Practice Issues: Statutory Interest, Damages Beyond Actual Loss, and Contracts Containing Riba

    Rulings on Common Legal Practice Issues: Statutory Interest, Damages Beyond Actual Loss, and Contracts Containing Riba QuestionSalam Sheikhna, I am a practicing lawyer and would like Islamic guidance on several issues that commonly arise in legal practice. Question 1: Pre Judgment and Post Judgment InterestIs a Muslim lawyer Islamically accountable for requesting and enforcing pre…

  • Is It Permissible for a Student to Intern at a Bank in a Cybersecurity or IT Role Despite Riba?

    Is It Permissible for a Student to Intern at a Bank in a Cybersecurity or IT Role Despite Riba? QuestionAssalamu alaykum, Is it permissible for a student to work in a bank for an internship in a cybersecurity or IT role, knowing that banks deal with riba? Due to the poor job market, there are…

  • Is the Nisab for Zakah in Canada Based on Gold Only, and Why Is 21K Gold Used?

    Is the Nisab for Zakah in Canada Based on Gold Only, and Why Is 21K Gold Used? QuestionSalam Imam, is the nisab for zakah based on gold and not silver today, since cash is no longer backed by silver? And is the correct gold standard 21K gold rather than 24K or 14K? How is this…

  • What Is the Sharia Ruling on Investing in Real Estate Investment Trusts (REITs)?

    What Is the Sharia Ruling on Investing in Real Estate Investment Trusts (REITs)? QuestionAssalam alaykum Sheikh. Please we need a fatwa stand on the following business related question. Real estate investment trusts (REITs) are companies that own, operate, or finance income producing real estate across a wide range of property sectors. They raise capital by…

  • Is General Forex Trading Haram, and Does Trading Gold, Silver, or Platinum Change the Ruling?

    Is General Forex Trading Haram, and Does Trading Gold, Silver, or Platinum Change the Ruling? QuestionSalam alaykum. Is general forex trading haram? What if it is used only for buying earth minerals like gold, silver, and platinum? Would it be permissible in this case? Jazakum Allah khair. AnswerAlhamdulillah, wassalatu wassalamu ala rasulillah, wa ala alihi…

  • Is It Permissible to Provide Marine Technical Services as a Contractor to Insurance Companies?

    Is It Permissible to Provide Marine Technical Services as a Contractor to Insurance Companies? QuestionAssalamualaikum dear sheikh. I have a small marine consulting business where insurance clients approach me to request technical inspections and advice on ships, boats, and other marine structures. I do not get involved in approving or denying claims, nor do I…

  • What Is the Sharia Ruling on Money Earned from Bank Interest (Riba al-Bunuk)?

    What Is the Sharia Ruling on Money Earned from Bank Interest (Riba al-Bunuk)? QuestionSalamu alaykum, I hope you are well.I would like to ask about money kept in the bank when a person receives extra money from the bank, known as riba al-bunuk (bank interest). What is the Sharia ruling in this case? Is the…

  • Is It Permissible to Keep, Use, or Donate Profits from a Shariah-Screened Investment ETF?

    Is It Permissible to Keep, Use, or Donate Profits from a Shariah-Screened Investment ETF? QuestionSalaam alaikum warahmatullah wabarakaatu. I invested some money into an investment that claims to be halal and that it “complies with Shariah law and excludes companies deriving more than 5% of their income from alcohol, tobacco, pork-related products, weapons, conventional banking…

  • Is a Contractor Required to Credit the Fair Market Value of a Deleted Item, or Only What He Actually Budgeted?

    Is a Contractor Required to Credit the Fair Market Value of a Deleted Item, or Only What He Actually Budgeted? QuestionSalam. A person submits a quote for a construction project based on a set of drawings. The drawings include item X. Later the client decides to cancel item X from the scope. He asks for…

  • Do I Have to Pay Zakah on Money I Loaned to Others, and What If the Borrower Cannot Repay?

    Do I Have to Pay Zakah on Money I Loaned to Others, and What If the Borrower Cannot Repay? QuestionDo I have to pay zakah on a loan that I have loaned to people? And what if they cannot pay it back and they are poor? Do I have to pay zakah on it? Can…

  • Is It Permissible to Purchase Company Shares When the Company Provides Supply-Chain Analytics?

    Is It Permissible to Purchase Company Shares When the Company Provides Supply-Chain Analytics? QuestionAs Salam U Alaikum,i wanna ask you about the permissibility of buying stock/equity that my company is offering me. Below is a simple explanation of what my company does. Everstream Analytics provides supply-chain risk forecasting for companies (weather risk, shipping delays, political…

  • What Is the Ruling on Interest Earned from Everyday Savings Accounts in Banks Like TD?

    What Is the Ruling on Interest Earned from Everyday Savings Accounts in Banks Like TD? QuestionWhat is the ruling on interest from Everyday Savings Accounts with banks such as TD?I recently opened a savings account to keep my money organized, but I do not want to deposit anything until I know the ruling. The bank…

  • Is Lead Generation for Mortgage Agents Permissible, and What Should Be Done With Past Income?

    Is Lead Generation for Mortgage Agents Permissible, and What Should Be Done With Past Income? QuestionIn the Name of Allah, the Most Gracious, the Most Merciful.Peace, mercy, and blessings of Allah be upon you. My name is Abdul Samad. I live in Pakistan but run an online lead-generation and marketing business in Canada. My work…

  • Is a Builder Allowed to Take on a Construction Project When the Client Is Financing It Through an Interest-Based Bank Loan?

    Is a Builder Allowed to Take on a Construction Project When the Client Is Financing It Through an Interest-Based Bank Loan? QuestionA brother in construction is asking: if he knows or is almost certain that his client is obtaining an interest-based loan from a conventional bank to finance the construction, is it permissible for him…

  • Is It Permissible to Purchase Short-Term Event Insurance?

    Is It Permissible to Purchase Short-Term Event Insurance to Rent a Hall for a Sisters-Only Gathering? QuestionAsalamou aleykoum,I’m planning a small sister-only gathering to celebrate moving into my husband’s home after my nikkah. My current apartment is too small to host everyone, so I’m looking into renting a small hall. Most venues I’ve found require…

  • Is a TFSA (Tax-Free Savings Account) Permissible in Islam?

    Is a TFSA (Tax-Free Savings Account) Permissible in Islam? QuestionIs a TFSA account haram? I read that it helps you avoid paying taxes on your savings, but since the bank invests that money and adds interest to it, is it still permissible to use? AnswerAlhamdulillah, wassalatu wassalamu ala rasulillah, wa ala alihi wa sahbihi ajma‘in.…

  • Is It Permissible to Take a Conventional Mortgage in Cases of Severe Hardship?

    Is It Permissible to Take a Conventional Mortgage in Cases of Severe Hardship? Questionبسم الله الرحمن الرحيمAs-salamu alaykum wa rahmatullahi wa barakatuh, I have always tried to avoid interest and refused to apply for a conventional mortgage, as riba is prohibited in Islam. I applied for an Islamic mortgage, but I was only approved for…

  • Car Financing Through Toyota: Bank vs. In-House

    Car Financing Through Toyota: Bank vs. In-House QuestionAssalamu Alaikum wa Rahmatullahi wa Barakatuh,I recently went to Toyota to finance a car. They told me they will give me the car through financing, and the monthly payments include interest. They said the price of the car will not change, but there will be interest added. My…

  • Professional Liability Insurance for Dietitians in Canada

    Professional Liability Insurance for Dietitians in Canada QuestionAssalam alaikum wa rahmatullahi wa barakatuh! I was wondering if you are familiar with services that provide professional liability insurance for dietitians in Canada that aligns with Islamic principles (takaful). In order to have and to maintain the permit of dietitians, it entails the following rules: College of…

  • Is Servus Halal, which has started launching in Alberta, a Murabaha or Musharakah product?

    QuestionIs Servus Halal, which has started launching in Alberta, a Murabaha or Musharakah product? What are the terms? AnswerAlhamdulillah, wassalatu wassalamu ala rasulillah, wa ala alihi wa sahbihi ajmain. What Servus Halal Is Key Terms of Servus Halal Mortgage Product Compliance with AAOIFI Standards Servus Halal has been structured in compliance with the standards of…

  • What is the ruling on investing in stocks?

    QuestionWhat is the ruling on investing in stocks? AnswerAlhamdulillah, wassalatu wassalamu ala rasulillah, wa ala alihi wa sahbihi ajmain. The General Principle The usul principle is: “Al-asl fi al-mu‘amalat al-ibahah” the default ruling in financial transactions is permissibility, unless there is clear evidence of prohibition. Therefore, investing in stocks is permissible in principle, provided the…

  • Is renter’s insurance allowed?

    QuestionAs-salamu alaykum wa rahmatullahi wa barakatuh. I have a question about tenant’s (renter’s) insurance. If a landlord requires tenant’s insurance as a condition for renting an apartment, are we allowed to purchase it? And is tenant’s insurance considered a necessity for living in a rental property in Edmonton? Jazakumullahu khayran. AnswerAlhamdulillah, wassalatu wassalamu ala rasulillah,…

  • Is car leasing/financing haram because it requires full insurance?

    QuestionSalam, I was told it was required to get the lowest coverage insurance for my vehicle in Canada because insurance is haram. When leasing or financing a vehicle it is required to obtain full coverage insurance by the company leasing or financing the car to you. Question #1 – Is obtaining full coverage insurance for…

  • Is working as a salesman at a car dealership is haram?

    QuestionSalam, I would like to know if working as a salesman at a car dealership is haram? Please let me know. Jazakallahu khayran. AnswerAlhamdulillah, wassalatu wassalamu ‘ala rasoolillah, wa ‘ala alihi wa sahbihi ajma‘in. The ruling depends on the type of sales and financing that the dealership uses. Islamic jurisprudence distinguishes between permissible trade and…

  • Can interest earned be used to pay off debt?

    QuestionCan interest earned be used to pay off debt? AnswerAlhamdulillah, wassalatu wassalamu ‘ala rasoolillah, wa ‘ala alihi wa sahbihi ajma‘in. Earning interest (riba) is haram, and a Muslim should avoid placing his wealth where it accrues interest whenever possible. The Prophet ﷺ cursed the one who consumes riba, the one who pays it, the one…

  • Can I take a line of credit for educational purposes?

    Question I am seeking a religious ruling on using a line of credit for educationI am a dentist living in Canada and I wish to start the Canadian dental equivalency process. In order to register for my first exam and the preparation course, I need a significant amount of money.I previously worked as a dental…

  • What is the ruling on purchasing full (comprehensive) insurance in Islam?

    QuestionWhat is the ruling on purchasing full (comprehensive) insurance in Islam? AnswerAlhamdulillah, wassalatu wassalamu ‘ala rasoolillah, wa ‘ala alihi wa sahbihi ajma‘in. Insurance is a modern financial product that did not exist in classical fiqh, so the scholars have had to analyze it according to the principles of Shariah. Full or “comprehensive” insurance covers not…

  • What is the ruling on working in the Human Resources (HR) department of a conventional bank?

    Question:What is the ruling on working in the Human Resources (HR) department of a conventional bank? Answer: Alhamdulillah, wassalatu wassalamu ‘ala rasulillah, Riba (usury/interest) is categorically forbidden in Islam, by Qur’an, Sunnah, and ijma‘. The Prophet ﷺ cursed the one who consumes riba, the one who pays it, the one who records it, and those…

  • I lent money in CAD but the recipient received it in PKR. How does he pay it back?

    QuestionI lent someone some money. I paid $1000 Canadian Dollars through an app, and he received about 190,000 Pakistani Rupees. Now, he wants to pay me back and I’m in Pakistan, so he will pay me in Rupees. But the value in Rupees changed, and now it’s around 205,000 Rupees to $1000. My question is:…

  • The rulings of day trading, short selling, options and gold trading.

    The rulings of day trading, short selling, options and gold trading. Praise be to Allah. 1. Day Trading (Cash Equities) 2. Day Trading with Margin 3. Short Selling 4. Options 5. Gold Trading Forms in the West: And Allah knows best.

  • Can crowdfunding for a halal startup or business idea be considered acceptable under Islamic investment rules?

    Bismillah Ar -Rahman Ar-Raheem, Question:Can crowdfunding for a halal startup or business idea be considered acceptable under Islamic investment rules? Answer:Crowdfunding refers to raising small amounts of capital from a large number of people, typically via an online platform, to fund a project, startup, or business. The concept itself is not inherently prohibited in Islam…

  • Musharakah: Islamic Partnership Contracts and Their Modern Applications

    The Prophet ﷺ said regarding partnerships: “The hand of Allah is with the two partners as long as they do not betray each other.”(Narrated by Abu Dawud, 3383; classed as hasan) Musharakah: Islamic Partnership Contracts and Their Modern Applications Definition:Mushārakah (مشـاركة) is an Islamic partnership contract in which two or more parties contribute capital to…

  • Is using buy-now-pay-later (BNPL) services Islamically permissible if paid off within the grace period?

    Question:Is using buy-now-pay-later (BNPL) services Islamically permissible if paid off within the grace period? Answer: 1. What are BNPL (Buy-Now-Pay-Later) Services? BNPL services allow customers to purchase goods immediately while delaying full payment. Typically, they offer: 2. Scholarly Consensus (Ijma‘) and Established Opinions Contemporary Islamic jurisprudential bodies, including AAOIFI and the International Islamic Fiqh Academy,…

  • Is reverse mortgage (home equity release) permitted for Muslim homeowners to fund retirement needs?

    Question:Is reverse mortgage (home equity release) permitted for Muslim homeowners to fund retirement needs? Answer: 1. Understanding Reverse Mortgage (Home Equity Release) A reverse mortgage allows elderly homeowners to borrow money against the equity in their home. Repayment usually occurs upon the homeowner’s death, sale of the property, or permanent relocation. The loan typically accumulates…

  • Is leasing a car halal?

    Question:Is it halal to lease a car if the owner is not financing it? Since I’m not owning the vehicle and I don’t plan to buy it at the end, can I consider it as renting a car? Is it permissible to have full insurance coverage for the leased car? And who is supposed to…

  • Can Muslims invest in ESG funds if they include companies with minor interest-based income?

    Question:Can Muslims invest in ESG funds if they include companies with minor interest-based income? Answer: 1. Definition and Nature of ESG Funds What are ESG Funds? ESG funds are investment funds prioritizing companies that meet specific criteria related to: However, these ESG funds may include companies that, although primarily ethical in business practices, generate a…

  • How should Muslims calculate zakah on digital assets like NFTs, stablecoins, and token holdings?

    1. Understanding Digital Assets in Islamic Terms Before calculating Zakah, it’s essential to classify digital assets according to traditional Islamic jurisprudential categories. Contemporary scholars generally categorize digital assets as follows: Zakah calculation differs based on these categories. 2. Conditions for Zakh Obligation Zakah is obligatory when these general conditions are met: 3. Calculating Zakah by…

  • Repaying a Loan After Currency Collapse

    Question:If someone lends money in Lebanese lira, and at the time of the loan it was worth a certain amount in US dollars, but the currency later collapses — can the lender request repayment in Lebanese lira equal to the original dollar value? Answer:Bismillahir Rahmanir Rahim In cases of economic collapse or severe devaluation, Islamic…

  • Are cashback and rewards from credit cards considered ribā (interest)?

    Question: Are cashback and rewards from credit cards considered ribā (interest)? Answer: بِسْمِ اللَّهِ الرَّحْمَنِ الرَّحِيمِ، الْـحَمْدُ لِلَّهِ رَبِّ الْعَالَمِينَ، وَالصَّلَاةُ وَالسَّلَامُ عَلَى أَشْرَفِ الْأَنْبِيَاءِ وَالْمُرْسَلِينَ، نَبِيِّنَا مُحَمَّدٍ، وَعَلَى آلِهِ وَصَحْبِهِ أَجْمَعِينَ، وَمَنْ تَبِعَهُمْ بِإِحْسَانٍ إِلَى يَوْمِ الدِّينِ. Conventional credit card agreements usually include a clause allowing the issuer to charge interest (ribā) on late…

  • Can a Muslim invest in conventional stock markets or ETFs?

    Question: Can a Muslim invest in conventional stock markets or ETFs? Answer: بِسْمِ اللَّهِ الرَّحْمَنِ الرَّحِيمِ، الْـحَمْدُ لِلَّهِ رَبِّ الْعَالَمِينَ، وَالصَّلَاةُ وَالسَّلَامُ عَلَى أَشْرَفِ الْأَنْبِيَاءِ وَالْمُرْسَلِينَ، نَبِيِّنَا مُحَمَّدٍ، وَعَلَى آلِهِ وَصَحْبِهِ أَجْمَعِينَ، وَمَنْ تَبِعَهُمْ بِإِحْسَانٍ إِلَى يَوْمِ الدِّينِ. Investment and business ownership are generally permissible in Islam, provided they are free from prohibited elements such…

  • What is the ruling on cryptocurrencies in Islamic finance?

    Question: What is the ruling on cryptocurrencies in Islamic finance? Answer: بِسْمِ اللَّهِ الرَّحْمَنِ الرَّحِيمِ، الْـحَمْدُ لِلَّهِ رَبِّ الْعَالَمِينَ، وَالصَّلَاةُ وَالسَّلَامُ عَلَى أَشْرَفِ الْأَنْبِيَاءِ وَالْمُرْسَلِينَ، نَبِيِّنَا مُحَمَّدٍ، وَعَلَى آلِهِ وَصَحْبِهِ أَجْمَعِينَ، وَمَنْ تَبِعَهُمْ بِإِحْسَانٍ إِلَى يَوْمِ الدِّينِ. Cryptocurrencies are a modern financial phenomenon not explicitly addressed in classical fiqh texts. However, their permissibility is assessed…

  • Is in-house financing for vehicles always halal?

    QuestionDoes in-house financing for vehicles always comply with Shariah? Or are there any specific requirements we should follow? Answer: Praise be to Allah. Firstly: The principle of financing in Islam Financing in Islam must comply with the principles of Shariah, which forbid riba (interest) and emphasize valid contracts, clear terms, and ownership of goods before…