Types of Usury
Types of Usury (Ribâ)
📖 The Scene: The Circle of Imam Malik — Prophet's Mosque ﷺ in Medina
Students of knowledge surround Imam Malik, may Allah have mercy on him, and one of them asks...
The Student: O Imam, usury confuses me. What is the difference between ribâ al-fadl and ribâ an-nasî'a?
Imam Malik (contemplating): Listen, my son, usury is of two major types, and both are forbidden by the text of the Messenger of Allah ﷺ...
He leans forward and begins explaining with the calm of a firmly grounded scholar...
Imam Malik: Ribâ al-fadl — is to sell something for its kind with an increase. And ribâ an-nasî'a — is to delay the taking of possession. Both are doors to injustice.
The Student: And why is ribâ al-fadl forbidden when both parties consent?
Imam Malik (raising his finger): To block the pretext, my son! If surplus is allowed today, the door of explicit usury will open tomorrow.
The Main Division of Usury
📜 The Comprehensive Hadith on Usury Rules
The Prophet ﷺ said: "Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, like for like, hand to hand. Whoever adds or asks for more has engaged in usury."
— Narrated by Muslim
Tree of Riba Types
Excess
Delay
Jahiliya
First: Ribâ al-Fadl (Usury of Surplus)
Definition
📜 The Meaning of Ribâ al-Fadl
Ribâ al-Fadl is: the increase in one of two usurious exchange items when a kind is sold for its own kind.
Al-Fadl linguistically: surplus, excess
Illustrative Examples
📖 At the Gold Market
The Buyer: I want to exchange 100 grams of old gold for new gold.
The Goldsmith: Sure, take 90 grams of new gold for your 100 old ones.
The Buyer: Why the reduction?
The Goldsmith: Because the new one has better craftsmanship!
⚠️ The Ruling: This is the forbidden ribâ al-fadl!
Gold for gold must be of equal weight, regardless of quality or craftsmanship.
Conditions for Valid Sale of a Kind for Its Kind
Two Conditions for Selling Ribawi Item for Same Type
Condition 1: Equality
⚖️ Equality in measure or weight
Gold = Gold
Wheat = Wheat
Violation = Riba al-Fadl
Condition 2: Immediate Exchange
🤝 Exchange in session (hand to hand)
Give and take at same time
Violation = Riba al-Nasī'ah
The Wisdom Behind Prohibiting Ribâ al-Fadl
📖 Dialogue: Why is Ribâ al-Fadl Prohibited?
The Questioner: O Sheikh, if both the seller and I agree on the surplus, what's the problem?
The Sheikh: To block the pretext, my son!
The Questioner: How so?
The Sheikh: Today you sell a kilo of gold for a kilo and a half "because my gold is better"... Tomorrow you'll say: a kilo of gold for two kilos with delay... And the day after you'll reach explicit Jahiliyyah usury!
The Questioner: I understand! The Sharia closed the door from the beginning.
The Sheikh (smiling): Excellent! The wisdom is to prevent reaching explicit usury gradually.
Second: Ribâ an-Nasî'a (Usury of Delay)
Definition
📜 The Meaning of Ribâ an-Nasî'a
Ribâ an-Nasî'a is: the delay in taking possession of one or both exchange items in the sale of usurious goods.
An-Nasî'a linguistically: delay, deferment
Divisions of Ribâ an-Nasî'a
Types of Riba al-Nasī'ah
Delay in same type
- •Sell gold for gold with delayed delivery
- •Sell wheat for wheat delivered after a month
- •Ruling: forbidden by absolute consensus
Delay between two types of same cause
- •Sell gold for silver on credit
- •Sell wheat for barley on credit
- •Ruling: forbidden due to common cause
The Evidence
📜 Hand to Hand
The Prophet ﷺ said: "If these kinds differ, then sell however you wish, as long as it is hand to hand."
— Narrated by Muslim
Explanation: Even if the kind differs (gold for silver, for example), taking possession in the session is mandatory.
Third: Usury of Loans (Jahiliyyah Usury)
📖 The Scene: In Pre-Islamic Times
A Qurayshi merchant stands before an indebted man, whose due date has arrived...
The Creditor (with a greedy look): Your due date has arrived! A thousand dinars!
The Debtor (troubled): By Allah, I don't have what to pay the debt!
The Creditor: Then: Do you pay or do you increase?
The Debtor: What do you mean?
The Creditor: Either you pay now, or I give you a year's delay... and you return one thousand five hundred!
The Debtor (broken): And if I can't after a year?
The Creditor (laughing): It becomes two thousand! And so on until you pay or you're sold!
The Narrator: This is the usury of Jahiliyyah that the Prophet ﷺ abolished in the Farewell Sermon.
Its Definition
📜 Usury of Loans
Usury of loans (Jahiliyyah usury): Any conditioned increase in a loan in exchange for the delay.
Its forms:
- I lend you a thousand on condition you return twelve hundred
- The due date arrives and he says: Do you pay or increase?
- Any "administrative fee" or "processing fee" on the loan
Its Severity
Why is Loan Riba the Most Severe?
Explicitly mentioned in the Quran
﴾Be warned of war from Allah and His Messenger﴿
It is the Jahiliya riba abolished by Islam
"The riba of Jahiliya is abolished"
Blatant exploitation of the needy
Creditor profits guaranteed, debtor drowns
Debt multiplies frightfully
1000 → 1500 → 2000 → 3000 → ...
Leads to enslavement of the debtor
In Jahiliya he was sold to repay
The Six Usurious Categories
The Six Textual Ribawi Items
Cause: monetary value
Cause: food + measure/weight
The Cause of Usury According to the Four Schools
| School | Cause for Gold & Silver | Cause for Foodstuffs |
|---|---|---|
| Hanafi | Weight with identity of kind | Measure or weight with kind |
| Maliki | Monetary value | Storable staple food |
| Shafi'i | Monetary value | Being food (edible) |
| Hanbali | Weight or monetary value | Measure/weight with food |
📜 The Practical Consequence
Benefit of the disagreement: Do iron and copper fall under usury?
- According to Hanafis: Yes, because they are weighed
- According to the majority: No, because the cause is monetary value, not weight
Rules for Selling Usurious Categories
Three Rules for Selling Ribawi Items
Rule ①: Same type
Gold/gold, wheat/wheat → Equality required + Immediate exchange required
Rule ②: Two types with same cause
Gold/silver, wheat/barley → Difference allowed + Immediate exchange required
Rule ③: Two types with different causes
Gold/wheat, silver/dates → Difference allowed + Delay allowed
Application Table
| Sale | Equality | Taking Possession | Ruling |
|---|---|---|---|
| Gold for gold | Mandatory | Mandatory | Permitted with both conditions |
| Gold for silver | Surplus allowed | Mandatory | Permitted hand to hand |
| Wheat for wheat | Mandatory | Mandatory | Permitted with both conditions |
| Wheat for barley | Surplus allowed | Mandatory | Permitted hand to hand |
| Gold for wheat | Surplus allowed | Delay allowed | Permitted absolutely |
| Riyal for dollar | Surplus allowed | Mandatory | Permitted hand to hand |
Usurious Tricks
📖 The Scene: Attempting to Circumvent the Sharia
A man enters a merchant's shop...
The Man: I need 10,000 riyals.
The Cunning Merchant: I have a method! I sell you this merchandise for 12,000 riyals deferred for a year...
The Man: But I don't need the merchandise!
The Merchant: No problem! You buy it from me, then sell it back to me immediately for 10,000 cash!
The Man (hesitating): So I get 10,000 and return 12,000?
The Merchant: Exactly! And this is a sale, not a loan!
⚠️ This is a forbidden usurious trick called "'înah sale"!
Types of Usurious Tricks
Most Famous Forbidden Usurious Tricks
Al-'Inah Sale
- •I sell to you on credit then buy from you for less cash
- •Goal: get cash with surplus
Organized Tawarruq (according to some)
- •Buy goods from bank on credit then sell back to same bank for cash
- •Client never even saw the goods!
Loan with Conditional Gift
- •I lend you on condition you gift me...
- •Or that you let me stay in your house...
Adding Interest to Product Price
- •Item is 100, but I write 120
- •And the surplus is "my profit"!
The Ruling on Tricks
📜 The Warning Against Tricks
Ibn Abbas (may Allah be pleased with him) said: "Do not commit what the Jews committed, making lawful what Allah forbade through the lowest of tricks."
— Narrated by Ibn Battah (stopped narration)
⚠️ Note: This is a mawquf athar (a statement stopped at Ibn Abbas), not a hadith elevated to the Prophet ﷺ. What is preserved is that it is Ibn Abbas's words.
The jurisprudential principle: What matters are the intentions and meanings, not the words and forms.
📖 From Stories of the Righteous Predecessors: The Piety of 'Umar ibn 'Abd al-'Azîz
📖 At the Governor's Palace — Medina
A man entered upon 'Umar ibn 'Abd al-'Azîz, may Allah have mercy on him, while he was governor of Medina...
The Man (complaining): O governor, a merchant lent me money and conditioned an increase!
'Umar (indignant): Bring the merchant!
The merchant is brought...
'Umar: What is this I've heard about you?
The Merchant (stammering): O governor, I only conditioned a gift he would give me, not an increase in money!
'Umar (firmly): Every loan that generates benefit is usury! Whether you call it a gift, increase, or benefit. What matters are the realities, not the names!
He turns to those present...
'Umar: Return the gift to its owner, and let this merchant repent to his Lord!
Then he says his famous statement:
'Umar: Whoever hovers around the sanctuary will eventually fall into it!
🎯 Contemporary Cases: Is This Usury?
Case 1: The Charitable Loan with Voluntary Increase
❓ The Question
I lent my friend 10,000 riyals, and at repayment he gave me 11,000 riyals of his own accord without me conditioning it.
Is this usury?
The Answer:
✅ No problem — with three conditions:
- It was not conditioned in the contract
- It's not a habit between you
- It wasn't expected from the beginning
📜 The Evidence
The Prophet ﷺ said: "The best among you are those who repay best."
— Agreed upon
Case 2: Selling a Car Cash or on Installments
❓ The Question
A car dealership sells a car:
- Cash: 80,000 riyals
- On installments: 95,000 riyals
The difference is 15,000 riyals. Is this usury?
The Answer:
✅ Permitted — it's not usury!
| The Loan (forbidden) | Installment Sale (lawful) |
|---|---|
| You take money and return more | You buy real merchandise |
| No merchandise in the transaction | The merchandise is the object of the contract |
| The increase = interest | The increase = price of the delay |
The fundamental difference: In the sale you own the merchandise, in the loan you take money to return money.
Case 3: Exchanging Old Gold for New
❓ The Question
I have old gold weighing 50 grams, I want to exchange it for new gold.
The goldsmith gives me 45 grams new for the 50 old.
Is it permissible?
The Answer:
❌ Not permissible — this is ribâ al-fadl!
❌ The Wrong Method
─────────────────────────
50 g old ⟷ 45 g new
(inequality = usury!)
✅ The Correct Method
─────────────────────────
Step ①: Sell the old gold for cash
50 g → 8000 riyals
Step ②: Buy the new with cash
8000 riyals → 45 g new
Case 4: Deferring Debt for Increase
❓ The Question
I have a debt of 50,000 riyals due, and I don't have the amount.
The creditor offers to defer payment for 6 months for an additional 5,000 riyals.
Is it permissible?
The Answer:
❌ Not permissible — this is Jahiliyyah usury!
"Do you pay or increase?"
This is exactly what the people of Jahiliyyah used to do, and it's forbidden by consensus.
Lawful alternatives:
- Request a delay without increase
- Borrow from elsewhere a charitable loan
- Sell something of your possessions
Case 5: Bank Interest
❓ The Question
I put my money in a bank savings account, and the bank gives me 3% annually.
Is this lawful?
The Answer:
❌ Forbidden — explicit usury!
Transaction Analysis:
─────────────────────
You ──(you lend)──► Bank
Bank ──(returns + surplus)──► You
= Loan with interest = Ribâ an-nasî'a
Lawful alternatives:
- Investment accounts in Islamic banks (mudârabah)
- Sharia-compliant investment funds
- Participation in real projects
💡 Stop and Reflect
📜 The Consequence of Usury
The Prophet ﷺ said: "Usury, even if it increases, will eventually decrease."
— Narrated by al-Hâkim
Questions for self-assessment:
🔹 Do you deal with any entity that gives you "guaranteed returns" on your money?
🔹 When borrowing, do you ensure the contract is free of any conditioned increase?
🔹 When buying gold, do you verify equality and taking possession?
🔹 Do you use credit cards that might lead you into usury?
🔑 Lesson Summary
Summary: Types of Riba
Riba al-Fadl = surplus in selling same type
Solution: equality and immediate exchange
Riba al-Nasī'ah = delay in exchange
Solution: exchange in session
Loan Riba = conditional surplus in loan
Solution: interest-free loan
Six items: gold, silver, wheat, barley, dates, salt
Tricks forbidden: intent matters, not form
Lord, increase me in knowledge