Riba as I understand
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Peace sis "Samia" and all,
The loan to be paid on any borrowed currency currency, which is what this is wht you indicated above, can by no means be considered "Riba". Theres a loan to be paid for anything you rent be it vehicles, buildings, currecnies etc. The mere fact tht there are different terms used for renting different things is irrelevant since last but not least its the same. A bank charges you what can be called a rent for giving outa certain currency, which ofcourse depends on how much you borrow so its fixed in %age of how much you borrow. But even here if you borrow much or for a longer time you may be given a concession and pay on a certain currncy less %age per yr than ud otherwise do. Now what is compound interest. Its actually a payment by the borrower due to a delay in return. In case of banks say interest rate is set at 5% for the USD per annum. Youve borrowed some of tht currency,say USD 10,000 at tth rate. Now the yr passes but you dont pay the "rent" which would amount to USD 500 in this case. Thus you now owe the bank USD 10,000 plus USD 500 and the next time you need to pay "rent" on that too otherwise the bank would be losing coz time is money. Now some foolish sectarians claim that one must not fix the amount paybale for a loan in money but must take into consideration profit and loss of the person, so called joint venture. Well tht can be practical if the bank had maybe 100 customers only. With a million ppl everyone has to take responsibility for themselves. The bank cant run after 1000s of ppl jsut because they cannot pay their rent. If theres a real prob THEY need to prove tht to the bank not the other way around coz they took the loan. Also these ppl lack a proper definition of money. Whts it? Merely currency, gold and silver? Local currency? Well here we have the real problem. Infact money can be anything of exchange value. A car,house , platinum gems etc. So does tht now mean tht before i rent somebody an appartment in my building would i ahve to first take his possible profit loss into account or is it ok to charge a fixed rent? And ofcourse even sunnis will agree tht it is. With currcneis its exactly the same thing.
So what is "Riba" then? Riba IMO is when people exploit the market at certain times when ppls needs re high and they charge extrardinary high prices and this can apply to anything, not just currencies, gold and silver. GOD Bless! -
Peace,
Ok I think that makes sense.. now Samia got me thinking confused
Samia I think it depends on the agreement? though if it's growing then it's probably riba ??? unless you agree before hand that by so and so date you need to repay 1100 in one year, and if you're not able to repay it by then an additional fee of 50$ every year until you pay it? Ok maybe that's sounding like riba...because it's rising I dunno.
Sometimes some banks charge you a % for making early repayments, I think that would be a form of riba..
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Peace sis "Sarah",
Peace,
Ok I think that makes sense.. now Samia got me thinking confused
Samia I think it depends on the agreement? though if it's growing then it's probably riba ??? unless you agree before hand that by so and so date you need to repay 1100 in one year, and if you're not able to repay it by then an additional fee of 50$ every year until you pay it? Ok maybe that's sounding like riba...because it's rising I dunno.
Sometimes some banks charge you a % for making early repayments, I think that would be a form of riba..
JK- Ok say the rent for a particular apartment is USD 100 per month. Now suppose i dont pay at the end of the month when payment was due so i now owe the renter USD 100 + %age of tht which amounts to the interest coz time is money. He/she cldve worked with tht money but now he/she didnt receive it on time so he cldve made less. Thts wht compound interest is all abt and its not Riba like tht. Only if u illegally cross the limits. GOD Bless!
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Not only is charging interest sinful, it is also sinful to accept a loan which has interest. This is why we Muslims in the God-forsaken West have to avoid their commercial banks. Jazakum Allah
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Yusha you are a man of little faith to believe that god forsakes part of his creation.
Whoever He has forsaken, it is because they have forsaken Him And be ye not like those who forgot Allah. and He made them forget their own souls! Such are the rebellious transgressors! (Al-Hashr 5919)
And why do you stay in the west ? It seems so hard for you...
I was born and raised in the West. Perhaps one day I will leave. In the meantime I will struggle my best to live a righteous life in a hedonistic world.
in "muslim" countries, most banks also take interest, just in case you ignored this
I know it's sad isn't. But in many countries, like in Saudi Arabia, they charge a fixed service fee, which is allowed in our religion.
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Peace Samia,
I have not come across such a loan type, as it's probably rarer, but lets say it exists. "riba" is something which grows/rises and is not fixed. What you described is simply a stealth form of "riba", a more palatable version but it's still "riba" in my opinion, thus type (2).
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Peace "yusha",
As ive explained in my earlier post inteerst is just another name for the "rent on a currency". What the hell is Riba or sinful abt tht. If however you, like a credit shark, take advantage of ppl whove been denied loans at registered banks and lend them money at extremely high interest rates then thtd be an example of Riba. Some ppl call this business since they say "well the demand is up. tht person cant get it from the baks so he has to come to me so i can raise the prices". NO! Yes for luyury items tht can be done but not for something as a currency where certain amount should be available to eevryone. Therefore the government scientifically anaylses and sets an upper bound for the rent/interest charged on currencies which msut not be violated. Hence the cshark is EXPLOITING the person and is now taking Riba which is forbidde. But Riba is not just limited to currecies. Say in a small village where there all shops are closed but some ppl r hungry. Some crook comes along and sells the necessary food items for them at 200% increased price. THT TOO IS RIBA but apparently the sunnis forgot abt tht. GOD Bless! -
Peace "wakas",
You said amongst other things- A loan that I feel is ok You borrow ?1000 and are asked to pay back ?1100 in one year's time for example. The repayment total (i.e. ?1100) is a fixed sum and does not change. No interest is constantly being added to the repayment total.
JK- Yes if the borrower returns the 100 Pound after the yr is over(banks normally charge interest yrly). If he doesnt and takes them along into the next yr then ofcourse he has to be charged for those 100 too and this is made clear to everyone from the start. GOD Bless!
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Peace "wakas",
You said amongst other things
JK- Yes if the borrower returns the 100 Pound after the yr is over(banks normally charge interest yrly). If he doesnt and takes them along into the next yr then ofcourse he has to be charged for those 100 too and this is made clear to everyone from the start. GOD Bless!Peace
Isn't it still interest though? You are still paying for something that wasn't part of the amount loaned? If someone lent me money and said I need to pay him back double then that is not interest because as you pay him back the amount gets smaller. Even if the interest isn't compounded there is still the possibility of being trapped forever paying someone back.Al
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Peace "aalmak",
Peace
Isn't it still interest though? You are still paying for something that wasn't part of the amount loaned? If someone lent me money and said I need to pay him back double then that is not interest because as you pay him back the amount gets smaller. Even if the interest isn't compounded there is still the possibility of being trapped forever paying someone back.Al
JK- The more you delay the greater the amount gets. If you pay the interest back within time the amount too gets smaller. As i told you and others time is money. Lets say youve taken a oan of 10000 GBP and irate is 5%. Your supposed to pay the bank 500 GBP after one yr and if you pay it within the yr then the next yr youll only have to pay 500 GBP again. If you dont then tht becomes part of your loan. GOD Bless!
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But Riba is not just limited to currecies. Say in a small village where there all shops are closed but some ppl r hungry. Some crook comes along and sells the necessary food items for them at 200% increased price. THT TOO IS RIBA but apparently the sunnis forgot abt tht. GOD Bless!
Jonnny ! you make an important point here.
siki
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Peace yusha
Whoever He has forsaken, it is because they have forsaken Him And be ye not like those who forgot Allah. and He made them forget their own souls! Such are the rebellious transgressors! (Al-Hashr 5919)
Its is whoever, person related, nothing to do with location.
lk
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Quote from jonny_k on Yesterday at 072426 PM
But Riba is not just limited to currecies. Say in a small village where there all shops are closed but some ppl r hungry. Some crook comes along and sells the necessary food items for them at 200% increased price. THT TOO IS RIBA but apparently the sunnis forgot abt tht. GOD Bless!Jonnny ! you make an important point here.
siki
If someone sells an item at 200% increased price that is NOT "riba". It is still a fixed price the item is being sold for. There is a difference between trade and "riba".
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If someone sells an item at 200% increased price that is NOT "riba". It is still a fixed price the item is being sold for. There is a difference between trade and "riba".
It's not riba, it's injustice, and malice.
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Peace bro "Wakas",
If someone sells an item at 200% increased price that is NOT "riba". It is still a fixed price the item is being sold for. There is a difference between trade and "riba".
JK- No man now your equating trade with Riba(out of bounds trading). This is exactly the problem. Yes people do call this trading and thexy boldly speak of free marketing. However the scitnfiic community checks ppls needs and sets the upper bounds for prices for certain necessary products and if you vilate them your not trading justly, your engaing in a form of Riba. Who on earth gave you this idea of fixed non fixed prices? I can bet it was the sunnis. Well lemme tell you something everything is fixed according to mathematical formulas and asnyone who understands them will know the amount to be paid aforetime. Btw if the person at any time shows the bank tht he can no longer pay then he can go to certain institutuions and they will regard him is inable. Then he may even be forgiven the debts totally. Yes but for tht the indidual has to come to the bank and explain his situation. The baks cant run after millions of customers. GOD Bless!
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peace,
However the scitnfiic community checks ppls needs and sets the upper bounds for prices for certain necessary products...
Please provide evidence for this alleged process.
...and if you vilate them your not trading justly,
I am not debating whether it is just or not, we are discussing what is "riba".
your engaing in a form of Riba.
Quranic evidence?
Who on earth gave you this idea of fixed non fixed prices? I can bet it was the sunnis.
Its possible. I do not claim to have overcome my traditional Sunni upbringing entirely, however I did not see you provide any Quranic evidence for your claims.
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Isn't it still interest though? You are still paying for something that wasn't part of the amount loaned? If someone lent me money and said I need to pay him back double then that is not interest because as you pay him back the amount gets smaller. Even if the interest isn't compounded there is still the possibility of being trapped forever paying someone back.
One can look at it as a dollar amount or a percentage. In the earlier case, if a fixed one time dollar amount of $100 is charged on a $1,000 loan to be paid in 1 year, it is a 10% annual simple interest (100/1000 x 100). Whether the charge is double or not, it can be seen either as a dollar amount ($) or a percent interest (%). How the charge is applied over a given term determines whether its a Simple or Compound Interest. Sometimes a fixed higher price includes a service or luxury charge among others, as seen in theaters or specialty entertainment parks where the price of a candy bar, coke or a bucket of popcorn is quite high, for example.General To understand a mortgage loan is not simple at all but here's a quick short overview. In a mortgage, there are essentially 3 types of interest charged loans Fixed, Adjustable (also called ARMs or Option ARMs) and Hybrid (adjustable + fixed), each of which come in varieties of options to accommodate individual's needs relevant to their specific criteria. The most "affordable" yet the riskiest of the three, is the ARM and the most beneficial over the life of the loan is the Fixed. Hybrids are somewhat similar to Fixed in the initial stages and excellent for shorter keeps.
The interest rates are based on Index (LIBOR) plus Margin (banks profit). Index fluctuates on a daily basis and not only depends upon LIBOR but also the Treasury and Savings & Loans economic financial factors. They are standard and sometimes remain "steady". The margins vary from lender to lender and are also dictated by their guidelines directly in synch with borrower's criteria. In short, Index plus Margin = Interest Rate, which then determines the annual percentage rate (APR) inclusive of other fees and charges. There's not a loan, at least that I know of, where principal is paid first and then the interest but the other way around, as is the case with ARMs. Individual's criteria, i.e. credit history, FICO score, income status, assets, employment history, down payment, closing costs, etc., dictates the individual's strenghts to borrow the amount and the type of loan on a home they may be elligible for, including negotiated conditions as agreed and signed by both the borrower and seller.
In general, there will always remain the fact that there are various types of mortgages, variious types of homes in various types of locations for various types of individuals including various types of government subsidized loans for the low income and the needy.
