What is the ruling on a loan in which an increase is stipulated at repayment?

Original answer — Shaykh ‘Abd al-‘Aziz ibn Baz

Question

«سؤاله الآخر يقول: هناك إنسان يقرض الناس بفائدة، فمثلًا: يعطي رجلًا مائة دينار لمدة ستة أشهر، فيأخذ على هذا المبلغ عشرين دينارًا مثلًا زيادة، فما حكم الإسلام في هذا؟»

English translation (unreviewed): His other question says: There is a person who lends people at interest; for example, he gives a man a hundred dinars for six months and takes twenty dinars, say, in addition on this amount. What is Islam's ruling on this?

From the text of the answer

«هذه المعاملة ربوية من أعمال الربا، حكمها أنها معاملة باطلة ربوية، الله -جل وعلا- حرم الربا ورسوله ﷺ لعن آكل الربا وموكله وكاتبه وشاهديه وقال: هم سواء والله يقول سبحانه: يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا [البقرة:٢٧٨] فالمعنى: أن الربا يجب أن يترك، ثم بيَّن أنه حرب لله وحرب للرسول -عليه الصلاة والسلام-.»

English translation (unreviewed): This transaction is usurious, one of the acts of riba; its ruling is that it is a void, usurious transaction. Allah, Mighty and Majestic, forbade riba, and His Messenger ﷺ cursed the one who consumes riba, the one who feeds it, its writer and its two witnesses and said: “They are all the same.” And Allah, Glorified, says: “O you who believe, fear Allah and give up what remains of riba” [al-Baqarah: 278]. This means that riba must be abandoned. Then He made clear that it is war against Allah and war against the Messenger, peace be upon him.

Evidence as the shaykh cited it

«فعلى المؤمن أن يحذر أنواع الربا كلها؛ ولهذا قال: فَإِنْ لَمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِنَ اللَّهِ وَرَسُولِهِ [البقرة:٢٧٩] يعني: فاعلموا بحرب من الله والرسول، وأنكم محاربون لله ورسوله في تعاطي الربا، فالفوائد في القروض ربا، فإذا أقرضه عشرة دنانير حتى يعطيه بعد ذلك اثني عشر أو ثلاثة عشر هذا من الربا، نعم.»

English translation (unreviewed): So the believer must beware of all kinds of riba. For this reason He said: “And if you do not, then be informed of a war from Allah and His Messenger” [al-Baqarah: 279], meaning: know that there is war from Allah and His Messenger, and that you are at war with Allah and His Messenger in dealing in riba. So interest on loans is riba: if he lends him ten dinars so that afterwards he gives him twelve or thirteen, this is riba. Yes.