Debt is a significant financial responsibility in every society, and Islam places immense emphasis on its repayment. Repaying debt in Islam is not just a financial duty but a moral and religious obligation. Islam encourages lending to those in need, but it also warns against negligence in repaying borrowed money. The Quran and Hadith provide clear guidance on loans, borrowing, and debt repayment, ensuring fairness and accountability in financial dealings.
In this article, we will explore the importance of repaying debt in Islam, its consequences if ignored, and the ethical approach towards borrowing and lending.
The Importance of Repaying Debt in Islam
Islam considers debt a serious commitment that must be honoured. Borrowing should only be done when necessary, and repaying it should be a priority. The Quran states:
“Indeed, Allah commands you to render trusts to whom they are due.” (Surah An-Nisa 4:58)
A debt is a trust given by the lender, and the borrower must return it as soon as possible. Islam teaches that fulfilling obligations, including repaying debts, is part of faith and good character.
Helping Debtors Through Zakat and During Ramadan
Islam provides ways to assist those struggling with debt, including helping them through Zakat (charity). One of the eight categories eligible to receive Zakat is Al-Gharimin (those in debt):
“Zakat expenditures are only for the poor, the needy, those employed to collect it, to attract the hearts of those who have been inclined (to Islam), to free captives, for those in debt, for the cause of Allah, and for the stranded traveller.” (Surah At-Tawbah 9:60)
This means that Muslims can use their Zakat to help clear the debts of genuinely struggling individuals. Additionally, Ramadan is a special time when acts of charity hold greater rewards. Helping debtors during Ramadan, whether by providing financial aid or forgiving loans, is a noble deed that earns immense blessings from Allah.
Hadiths on Repaying Debt
Prophet Muhammad (peace be upon him) repeatedly stressed the importance of clearing debts before death. He warned that an individual who dies with unpaid debt may face consequences in the Hereafter. One narration states:
“The soul of a believer is held back until his debt is paid on his behalf.” (Sunan al-Tirmidhi 1078)
This Hadith highlights that even if a person is righteous, their soul may not attain complete peace if they leave unpaid debts. The Prophet (PBUH) also made it clear that unpaid debts could affect one’s final standing before Allah:
“Whoever takes people’s wealth with the intention of repaying it, Allah will help him repay it. And whoever takes it to waste it, Allah will destroy him.” (Sahih al-Bukhari 2387)
Thus, borrowing with sincere intentions and making efforts to repay is not only financially wise but also spiritually beneficial.
The Consequences of Not Repaying Debt
Failure to repay debts has serious consequences, both in this world and the Hereafter. Islam strongly discourages taking a loan without the intent of returning it. Prophet Muhammad (PBUH) warned:
"The martyr is forgiven for everything except debt." (Sahih Muslim 1885)
This Hadith demonstrates that even someone who sacrifices their life for Islam may not be forgiven if they have unpaid debts. Furthermore, social consequences include loss of trust, strained relationships, and legal repercussions.
The Ethical Approach to Borrowing and Lending in Islam
To maintain financial justice and social harmony, Islam lays down guidelines for both borrowers and lenders:
For Borrowers:
Borrow only when necessary – Islam discourages unnecessary debt unless it is for essential needs.
Intend to repay – The Prophet (PBUH) emphasized that one should borrow with a sincere intention to return the amount.
Document the loan – The Quran instructs Muslims to write down financial transactions to prevent disputes:
“O you who have believed, when you contract a debt for a specified term, write it down.” (Surah Al-Baqarah 2:282)
Inform heirs about outstanding debts – If a person passes away, their family should be aware of their financial obligations.
Avoid unnecessary loans – Islam discourages borrowing for luxurious or non-essential purposes.
For Lenders:
Be compassionate – Islam encourages kindness and flexibility in dealing with borrowers.
Avoid interest (Riba) – Charging interest on loans is strictly prohibited in Islam:
"Allah has permitted trade and has forbidden interest." (Surah Al-Baqarah 2:275)
Give time for repayment if needed – If a debtor is struggling, Islam advises patience and even forgiving the debt as a charitable act:
"And if someone is in hardship, then let there be postponement until a time of ease. But if you give it as charity, it is better for you, if you only knew." (Surah Al-Baqarah 2:280)
Encourage responsible borrowing – Lenders should ensure that borrowers understand their obligations and do not fall into cycles of unnecessary debt.
Practical Steps to Ensure Debt Repayment
If one has taken a loan, they should prioritize repaying it by:
Budgeting wisely – Allocate a portion of earnings for repaying loans.
Avoiding wasteful spending – Extravagance can delay debt repayment.
Seeking financial help from family or friends – If struggling, discuss options for assistance.
Making dua (prayer) for debt relief – The Prophet (PBUH) taught a dua for those in debt:
“O Allah, suffice me with what You have allowed instead of what You have forbidden, and make me independent of all others besides You.” (Sunan al-Tirmidhi 3563)
Setting up a will – Ensure that debts are cleared if anything happens unexpectedly.
The Reward for Helping Others Pay Off Debt
Islam highly rewards those who help others in financial distress. The Prophet (PBUH) said:
“Whoever relieves a Muslim of a burden from the burdens of this world, Allah will relieve him of a burden from the burdens on the Day of Judgment.” (Sahih Muslim 2699)
This Hadith encourages acts of kindness such as forgiving debts, granting extensions, or providing financial assistance to those in need.
Repaying debt in Islam is a serious obligation that carries both worldly and spiritual consequences. The Quran and Hadiths emphasize that debt should be taken only when necessary, and borrowers must have a clear intention to repay. Failure to do so can result in divine accountability, while fulfilling obligations leads to blessings and peace in life.
As Muslims, it is our duty to be honest in financial dealings, whether as borrowers or lenders. By following Islamic principles, we can build a responsible financial system based on trust, ethics, and social welfare.
May Allah guide us in handling our financial responsibilities wisely and grant relief to those struggling with debt. Ameen.
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