queer
August 9, 2012, 12:00am
12
Re: Balance transfer fee or another form Interest?
Islamic loans have rules … The most obvious rule is they are meant as a charitable gesture. If there is talk of a loan and business being made from this loan … Then it is riba …
Consider Buyer A goes to Seller B and they barter to agree a price $P on some commodity. When the deal is done, Buyer A says he cannot purchase the commodity because he does not have enough money … So, B gives him the option to pay that $P over a year.
Now consider a mortgage A goes to B and asks for loan to buy house $P … Since B wants to make money on this … B buys the house at $P and then sells the house to A at price $P+$X … However, when the deeds come to A and the value of the property is in actual fact only $P … The effect is that B has taken A $X amount out of pocket. So even a fixed amount above the purchase price is not working out as “fair” … It is not as if the house price is equal to the buying price.
Consider loan taken by A from B … And B charges 1% for the service … Service of paying off a debt … Only to put them in a different one … Claiming 0% interest, but have already taken 1% of the full amount …
Say … Loan = £10,000 … 1% = £100 … It could save a lot of money, but it still riba. They gamble with the prospect of taking the debt off someone else, in return for charging you less for a short period of time.
Islamic loans are charitable … Please remember that.
all this relies on one basic tenet - that the value of money is the same at all times.
which is never true. money is more valuable at times of shortages, and less in times of excess. an interest rate is a price tag on using someone’s money. it becomes usury only when the price is exorbitant, or not made clear to the paying party.