QuestionCan I contribute to the Employee Investment Program that the company I work for offers?Salamu Alaikum. My company offers a program where I can invest money into the company and receive a guaranteed return of at least 10%, with the possibility of earning more depending on the company’s performance. Earnings are calculated monthly based on … Read more
Question: Can you explain what Halal financing through a Murabaha agreement is, and how it differs from conventional financing? Answer : Murabaha is one of the most straightforward contracts in the Islamic finance industry. Simply put, it is a cost-plus-profit sale. But it must meet several key conditions (cornerstones): 1. Ownership:The financial institution (in this … Read more
Question: Is it allowed to work for MasterCard or Visa? Answer:It depends on the nature of the work. MasterCard and Visa primarily operate in the financial sector, offering services that are largely based on interest-bearing (riba) contracts, which are not considered halal in Islamic finance. Therefore, it is not permissible to be directly involved in … Read more
Question: Do I have to pay zakat on my watch collection? Answer: It depends on your intention behind owning the watches. If you bought the watches as an investment, with the intention of selling them later to make a profit, then zakat is due on their current market value. In this case, they are considered … Read more
Do Women Pay Zakat on Their Personal Gold Jewelry? How to Understand the Hadiths and the Different Opinions 1. The Hadith About the Gold Bangles This is one of the key hadiths used as evidence by the Hanafi school: A woman came to the Prophet ﷺ with her daughter wearing two thick gold bangles.He asked, … Read more
Question: How to live in western society without a credit card? Ex- rent, travel, credit score, etc. And how to discuss with family that wants you to get a credit card. Answer: According to the Assembly of Muslim Jurists of America (AMJA), in today’s Western society, especially in North America, having a credit card has … Read more
Question: What Is the Ruling on Pitching Phone Warranties and Late Payment Fees When Working at a Telecom Company? QuestionIf someone works at a phone company (such as Telus) and is required to pitch warranties on the phones they sell, what is the ruling on that? Also, what is the ruling on late payment fees … Read more
Are pawn shops allowed in Islam? There are two situations to consider when it comes to pawn shops in Islam: 1. Selling Your Item with No Strings Attached:If you sell your item to the pawn shop for a fixed price, and there’s no agreement to buy it back or change your mind later, this is … Read more
Question: When in-house financing a car through Toyota, you can go through their own Toyota Financial Services . They still charge interest on the loan provided, why is this halal and how is it different then getting a mortgage through a bank? Answer: Buying a Car through Islamic Financing: What’s Allowed and What’s Not When … Read more
There is a difference between a halal Murabaha mortgage and a conventional mortgage, both in structure and underlying principles. 1. Fundamental BasisConventional Mortgage: Involves a loan with interest (riba). The bank lends you money to buy a house, and you repay it with interest over time. Murabaha Mortgage: Based on Islamic finance principles that prohibit … Read more
Buying a Car through Islamic Financing: What’s Allowed and What’s Not Question: When financing a car through Toyota, you can go through their own Toyota Financial Services . They still charge interest on the loan provided, why is this halal and how is it different then getting a mortgage through a bank? Answer: When you … Read more
Zakah on lent money Q: Do I have to pay zakah on money I lent to someone else?A: It depends on the financial status of the borrower: Scenario: The borrower is wealthy and capable of repaying Example:If you lent $20,000 and you have $1,000,000 in your account: Scenario: The borrower is struggling or refuses to … Read more
How to calculate zakah on Inheritance Q: How do heirs calculate zakah on inheritance?A: Each heir must: Example:If a person has $70,000 in personal wealth and their share of inheritance is $20,000, they will: Q: What if the inheritance hasn’t been distributed yet?A: If the inheritance remains undivided for a full year, then zakah is … Read more
Zakah on Inherited wealth Q: Does zakah apply to inherited wealth or wealth that has reached the nisab and a full year has passed?A: Yes, zakah is due on inherited wealth as long as it: Wallahu Alam
Zakah on RRSP (Registered Retirement Savings Plan) Q1: Do I have to pay zakah on my RRSP or other savings plans like educational savings?A1: Yes, you have to pay zakah if: Q2: But what if I can only access my RRSP funds after many years (like 20–25 years)?A2: If you don’t have full access, zakah … Read more
Zakah on RRSP & Registered Educational Plans Q: Do we have to pay zakah on a registered educational plan or RRSP? A: Yes, zakah is due if the amount reaches the nisab (around $11,000 CAD) and has been held for a full year, as long as you have access to it. Q: What if I … Read more
MORTGAGE & HOMEOWNERSHIP 15. Q: What is the general Islamic ruling on riba-based mortgages? A: The general ruling is that riba is haram. Taking a conventional mortgage involving interest is not permitted. 16. Q: Can someone take a riba-based mortgage due to housing difficulties? A: Only in extreme necessity (darurah)—such as when a person with many dependents cannot find … Read more
CAR LOANS & PERSONAL FINANCING 24. Q: Is it permissible to take a riba-based loan to buy a car? A: No. Car loans that involve interest are not permissible if halal alternatives exist (e.g., in-house financing). 25. Q: What if luxury car brands don’t offer halal options (e.g., Mercedes)? A: That does not justify taking riba. One should choose a more affordable vehicle … Read more
1. Q: Can a student take a loan just to access attached grants, if they already have enough money? A: Yes, if the loan is interest-free for a set period (e.g., six months) and the borrower: Then this is permissible, based on the principle: “Al-umūr bimaqāsidihā” – Actions are judged by intentions. 2. Q: Are student loans that include interest (riba) … Read more
Q&A Collection: Student Loans, Riba, Mortgages & Halal Finance Dr. Mahmoud Omar Organized by Topic for Clarity STUDENT LOANS & FINANCIAL AID 1. Q: Can a student take a loan just to access attached grants, if they already have enough money? A: Yes, if the loan is interest-free for a set period (e.g., six months) … Read more
Q: If a child pays off their parents’ debts, such as mortgages and car loans, does that make them the owner of those assets? A: It depends on the intention. If the money was given as a gift (hibah) with no expectation of return or ownership, then the asset remains the parents’ property. But if … Read more
1. Q: What is the Islamic concept of hibah (gifting), and how should it be practiced? A: Hibah is giving something to someone without expecting anything in return. It is done sincerely for the sake of Allah. If a person gives a house, money, or furniture and intends no repayment, then it’s a valid hibah. … Read more