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**inilbowly** · 08-25-2011, 07:36 PM

Inshallah, I hope a scholar answers this soon.

I'll just give my thoughts based on my economics knowledge (not islamic). Classically Interest means a rent on money, it is not a rent on anything else. For example, I may rent £1,000 for £50 per year. That would be considered a loan of £1,000 with interest of 5%. Now if I was to rent say a fridge worth £1,000 for £50. Would that be considered 'interest'? In non-islamic (i'm only emphasising this to show i do not know the answer islamically) economics it wouldnt. it would be considered rent and not interest. Why? Because you are renting an object/service and not money itself.
Let me give you another example. Imagine you have a mortgage on a £100k house. What are you paying interest on? The amount of money you borrowed. Imagine instead you live in a £100k house and you pay money to someone to live there. Is that considered rent or interest? Normally most people would say rent because your paying money for a physical service/object and not on money.

Now in this case, this £1 fee appears to be a rent on a service. It is not related to the amount of money you borrow. if you considered it was, it would be infinitely variable. For example, if you borrowed £1, then if you consider the service fee of £1 to be interest, than daily interest rates would be 100%. if you borrowed £1,000 than your daily interest rate would be 0.1%. Interest doesn't work like that. It is calculated as a fixed ratio of amount of money borrowed, that's why interest is always seen as a % sign.

Allah Knows Best. I hope Inshallah you get a response here because it would increase our knowledge also of this important topic. Otherwise have you checked Sunnipath, your imam etc?

08-25-2011, 07:36 PM	#5
inilbowly Join Date Oct 2005 Posts 497 Senior Member	Inshallah, I hope a scholar answers this soon. I'll just give my thoughts based on my economics knowledge (not islamic). Classically Interest means a rent on money, it is not a rent on anything else. For example, I may rent £1,000 for £50 per year. That would be considered a loan of £1,000 with interest of 5%. Now if I was to rent say a fridge worth £1,000 for £50. Would that be considered 'interest'? In non-islamic (i'm only emphasising this to show i do not know the answer islamically) economics it wouldnt. it would be considered rent and not interest. Why? Because you are renting an object/service and not money itself. Let me give you another example. Imagine you have a mortgage on a £100k house. What are you paying interest on? The amount of money you borrowed. Imagine instead you live in a £100k house and you pay money to someone to live there. Is that considered rent or interest? Normally most people would say rent because your paying money for a physical service/object and not on money. Now in this case, this £1 fee appears to be a rent on a service. It is not related to the amount of money you borrow. if you considered it was, it would be infinitely variable. For example, if you borrowed £1, then if you consider the service fee of £1 to be interest, than daily interest rates would be 100%. if you borrowed £1,000 than your daily interest rate would be 0.1%. Interest doesn't work like that. It is calculated as a fixed ratio of amount of money borrowed, that's why interest is always seen as a % sign. Allah Knows Best. I hope Inshallah you get a response here because it would increase our knowledge also of this important topic. Otherwise have you checked Sunnipath, your imam etc?
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