Money can bring people together, but it can also destroy relationships. What does Islam teach us about borrowing, lending, repaying debts and treating people fairly when money is involved?
Money is one of the most sensitive subjects in human relationships. It can create opportunities, provide comfort and help people overcome difficult situations. However, when handled carelessly, it can also become a source of misunderstanding, broken promises, mistrust and even lifelong resentment.
Think about how many friendships have ended because someone borrowed money and refused to repay it. Think about families that stopped speaking to one another because of unpaid debts. Think about people who desperately needed financial assistance but were humiliated by those who had the means to help them.
Unfortunately, these situations are not uncommon in our communities.
As Muslims, we must understand that borrowing and lending money are not merely financial transactions. They are matters of trust, responsibility, justice and accountability before Allah.
Islam does not prohibit borrowing money when there is a genuine need. Neither does it discourage helping someone who is experiencing financial difficulty. Instead, Islam provides clear ethical principles that protect both the borrower and the lender.
From fulfilling promises to avoiding interest, documenting debts and showing compassion towards people in financial difficulty, Islamic teachings offer a balanced approach to financial relationships.
So, what does Islam actually say about borrowing and lending money? What responsibilities does a borrower have? Is a lender allowed to demand additional money? And what happens when someone refuses to repay a debt despite having the means?
Let’s explore these important questions.
1. BORROWING MONEY IS A RESPONSIBILITY, NOT AN OPPORTUNITY TO TAKE ADVANTAGE OF PEOPLE
There are times when life becomes financially difficult. A person may need money to pay medical bills, settle an urgent expense, support their family or overcome an unexpected challenge.
Islam recognises that people may sometimes need financial assistance.
However, borrowing money should never be treated casually.
When someone lends you money, they are placing their trust in you. They expect you to honour your commitment and return what belongs to them.
Prophet Muhammad (peace and blessings be upon him) warned against taking people’s wealth with the intention of refusing to repay it.
He said:
“Whoever takes the money of people with the intention of repaying it, Allah will repay it on his behalf; and whoever takes it with the intention of wasting it, Allah will destroy him.”
(Sahih al-Bukhari, Hadith 2387)
This Hadith teaches an important lesson: your intention matters when borrowing money.
If you genuinely intend to repay what you borrow, you should make every reasonable effort to fulfil that responsibility.
However, borrowing money while already intending to disappear, make excuses or refuse repayment is a serious betrayal of trust.
Being in financial difficulty is understandable. Deliberately taking advantage of someone’s kindness is not.
2. LENDING MONEY IS AN ACT OF KINDNESS AND A FORM OF WORSHIP
Imagine having enough money to meet your needs while someone close to you is struggling to afford basic necessities.
You have the opportunity to help, but you choose to ignore their situation simply because you do not want to be inconvenienced.
Islam encourages Muslims to show compassion and assist people facing genuine hardship.
Lending money to someone in need can be an act of kindness that earns tremendous reward when done sincerely for Allah.
Allah says:
“Who is it that would loan Allah a goodly loan so He may multiply it for him many times over?”
(Qur’an 2:245)
This verse encourages believers to spend in ways that please Allah. It is not suggesting that Allah needs money, but rather highlighting the immense reward He promises for sincere generosity.
A particularly beautiful teaching comes from Prophet Muhammad (peace and blessings be upon him).
He said:
“Whoever gives respite to someone in difficulty or grants him relief, Allah will shade him under His Shade on the Day when there will be no shade but His Shade.”
(Sahih Muslim, Hadith 3006)
Imagine being remembered for helping someone when they had nowhere else to turn.
Your loan may have helped someone keep their business running, pay for essential treatment, provide food for their family or escape a difficult situation.
Sometimes, the money you lend today becomes one of the good deeds you hope to meet on the Day of Judgment.
However, lending should always be done within your financial ability. Islam does not require you to put yourself or your dependants into hardship to assist another person.
3. WHY IS RIBA (INTEREST) PROHIBITED IN ISLAM?
One of the most important principles of Islamic financial ethics is the prohibition of Riba.
Riba is commonly translated as interest or usury, and its prohibition is established clearly in the Qur’an.
Allah says:
“Allah has permitted trade and has forbidden interest.”
(Qur’an 2:275)
Islam distinguishes between legitimate business transactions and interest-based lending.
For example, if you lend someone ₦100,000, you are entitled to receive your ₦100,000 back.
However, making it a condition that the borrower must return ₦120,000 simply because they borrowed your money is a form of prohibited interest.
The additional ₦20,000 is not payment for a genuine sale of goods or a legitimate business partnership. It is an increase stipulated on the loan.
Islam discourages financial arrangements that exploit people’s needs and allow wealth to grow through unjustified interest.
This does not mean Islam prohibits profit.
Muslims can engage in legitimate trade, investment, partnerships and other permissible business activities, provided they comply with Islamic principles.
The important distinction is that a loan should not become a means of exploiting someone who needs financial assistance.
4. THE IMPORTANCE OF WRITING DOWN DEBTS
One of the most overlooked teachings about borrowing and lending money is the importance of documentation.
Many Muslims borrow money from friends, relatives, neighbours and colleagues without writing anything down.
They simply say:
“Don’t worry, I will pay you back.”
Unfortunately, misunderstandings sometimes arise later.
The borrower may remember a different amount. The lender may forget the agreed repayment date. One person may believe the money was a gift, while the other considers it a loan.
Islam provides guidance on preventing such situations.
In the longest verse of the Qur’an, Allah gives detailed instructions about documenting financial debts.
Allah says:
“O you who have believed, when you contract a debt for a specified term, write it down.”
(Qur’an 2:282)
This verse emphasises the importance of recording debts, establishing clear terms and ensuring fairness between the parties.
A proper loan agreement should establish:
- The exact amount borrowed.
- The date the money was received.
- The agreed repayment date or schedule.
- Any relevant terms agreed upon by both parties.
- Evidence of the transaction where appropriate.
Documentation is not a sign of distrust.
Even if the borrower is your sibling, closest friend or trusted business associate, recording the agreement can protect everyone involved.
In fact, documenting financial agreements can prevent unnecessary arguments and preserve relationships.
5. WHAT IF SOMEONE BORROWS MONEY AND REFUSES TO PAY BACK?
This is one of the most frustrating experiences a person can have.
You help someone during a difficult period, only for them to become unreachable when it is time to repay the money.
They stop answering calls, ignore messages and invent excuses whenever you ask about the debt.
Some people even become angry when reminded of money they willingly borrowed.
Islam takes the rights of other people seriously.
A debt does not disappear simply because the borrower refuses to acknowledge it.
Prophet Muhammad (peace and blessings be upon him) said:
“Procrastination in repaying a debt by a wealthy person is injustice.”
(Sahih al-Bukhari, Hadith 2400; Sahih Muslim, Hadith 1564)
This Hadith makes an important distinction.
A person who genuinely cannot afford to repay a debt should be treated differently from someone who has the money but deliberately refuses to pay.
If you have the means to repay what you owe, intentionally delaying payment is an act of injustice.
Borrowers must understand that being someone’s friend or relative does not give them permission to disregard financial obligations.
If you owe someone money, do not wait until they become angry before taking responsibility.
Communicate honestly, make a repayment plan and honour your commitments.
6. WHAT IF THE BORROWER GENUINELY CANNOT AFFORD TO REPAY?
Not everyone who delays repayment is dishonest.
Sometimes, people experience unexpected financial difficulties. A business may collapse, employment may be lost, medical expenses may increase or other circumstances may make repayment temporarily impossible.
Islam encourages compassion towards people experiencing genuine hardship.
Allah says:
“And if someone is in hardship, then let there be postponement until a time of ease. But if you give from your right as charity, then it is better for you, if you only knew.”
(Qur’an 2:280)
This verse provides beautiful guidance for lenders.
If someone genuinely cannot repay a debt, the lender should give them additional time.
And if the lender chooses to forgive the debt entirely as an act of charity, that is even better.
Consider the difference between two situations:
Situation one: Someone has money, but refuses to repay because they believe the lender cannot do anything about it.
Situation two: Someone has lost their source of income and genuinely cannot afford to repay the debt.
Islam does not treat these situations as identical.
The first involves injustice, while the second calls for patience and compassion.
As Muslims, we should not humiliate people who are genuinely struggling financially.
At the same time, borrowers should not use financial hardship as a permanent excuse to avoid honest communication and reasonable repayment efforts.
7. IS IT PERMISSIBLE TO FORGIVE SOMEONE’S DEBT?
Yes. Forgiving a debt is permissible and can be a highly rewarding act of charity.
Sometimes, a lender may realise that the borrower is experiencing serious hardship and decide not to demand repayment.
This can be a beautiful expression of mercy.
Allah says in Qur’an 2:280 that forgiving the debt as charity is better for the lender.
Think about someone who borrowed money during a difficult period and has since become unable to repay it.
Rather than constantly reminding that person of their inability, a lender may choose to forgive the outstanding amount for the sake of Allah.
Such generosity can make an enormous difference in someone’s life.
However, forgiving a debt should be a voluntary decision.
Nobody should be pressured into forgiving money that is rightfully theirs, especially when they also have financial responsibilities.
Islam encourages kindness, but it does not permit people to exploit the kindness of others.
8. SHOULD YOU LEND MONEY YOU CANNOT AFFORD TO LOSE?
This is an important practical question.
Sometimes, people feel obligated to lend money because the person asking is a relative, friend or respected member of their community.
They may even borrow from someone else to assist the person.
However, generosity must be balanced with wisdom.
Islam does not require you to neglect your responsibilities or place your family in financial difficulty.
If lending a particular amount will prevent you from paying your rent, feeding your children, settling essential bills or meeting your own obligations, you should carefully reconsider the decision.
You can still help someone in other ways.
For example:
- Give a smaller amount that you can comfortably afford.
- Help them identify other sources of assistance.
- Support them with food or essential items.
- Offer practical advice or assistance.
- If appropriate, help them access charitable support.
Remember that you are not required to solve every financial problem you encounter.
Helping someone should not create another crisis in your own household.
9. WHAT ABOUT BORROWING MONEY FROM FAMILY AND FRIENDS?
Money matters can become especially complicated when family and friendship are involved.
Some people believe that because they are related, repayment should not be taken seriously.
Others become uncomfortable asking relatives to repay money because they fear damaging family relationships.
However, Islam teaches us to respect people’s financial rights regardless of our relationship with them.
If your brother lends you money, you should repay him.
If your sister helps you financially, you should honour the agreement.
If your friend supports you during a difficult time, you should not take that kindness for granted.
Being family does not automatically turn a loan into a gift.
Likewise, being close friends does not remove the responsibility to fulfil an agreement.
If you are lending money to someone close to you, make the terms clear from the beginning.
If you are borrowing, be honest about your ability to repay.
Do not allow financial misunderstandings to destroy relationships that should be built on love, trust and mutual respect.
10. WHAT HAPPENS TO UNPAID DEBTS WHEN A PERSON DIES?
This is a particularly serious aspect of borrowing and lending in Islam.
Many people focus on leaving behind property, money and other possessions for their families, but forget that they may also leave behind unpaid financial obligations.
In Islam, debts are treated seriously even after death.
Allah explains the distribution of inheritance in Surah An-Nisa, including the importance of settling outstanding bequests and debts.
For example, Allah mentions the inheritance shares of children and parents in Qur’an 4:11 and the shares of spouses in Qur’an 4:12, with the relevant conditions concerning debts and bequests.
Generally, outstanding debts must be settled from the deceased person’s estate before the inheritance is distributed to the rightful heirs, subject to the rules of Islamic inheritance.
Prophet Muhammad (peace and blessings be upon him) also emphasised the seriousness of unpaid debts.
In a Hadith recorded in Sahih Muslim, he explained that a martyr’s sins are forgiven except for debt.
This demonstrates how seriously Islam treats financial obligations owed to other people.
Therefore, Muslims should make a habit of keeping proper records of what they owe.
If you have outstanding debts, let trusted family members know about them and ensure that the relevant information is documented.
Do not assume that your family will automatically know who you owe money to after your death.
A responsible Muslim should prepare for the possibility that death may come before every financial obligation has been settled.
11. IS IT WRONG TO ASK SOMEONE TO REPAY MONEY YOU LENT THEM?
No. Asking for repayment of a legitimate debt is not wrong.
Sometimes, people who lend money feel uncomfortable requesting repayment because they fear appearing selfish or unkind.
But remember that Islam protects the rights of both the lender and the borrower.
If you lent someone money with a clear agreement that it would be repaid, you have the right to request your money.
You should, however, communicate respectfully.
Avoid insults, threats, public humiliation or unnecessary embarrassment.
If the borrower is genuinely struggling, consider allowing additional time where you are able to do so.
But if the borrower has the means and deliberately refuses to repay, you are entitled to pursue reasonable and lawful ways of recovering your money.
Kindness does not mean allowing others to take advantage of you.
12. PRACTICAL ISLAMIC GUIDELINES FOR BORROWERS AND LENDERS
Understanding Islamic financial ethics is important, but putting these principles into practice is even more important.
Here are some guidelines every Muslim should remember.
For borrowers:
- Borrow only when necessary or when you have a reasonable plan for repayment.
- Make your intention to repay clear and sincere.
- Never lie about your financial situation to obtain a loan.
- Agree on repayment terms before receiving the money.
- Do not deliberately delay repayment when you have the means.
- Inform your lender immediately if unexpected difficulties arise.
- Keep a record of your outstanding debts.
- Never treat another person’s generosity as an entitlement.
For lenders:
- Lend only what you can reasonably afford.
- Make the terms of the loan clear.
- Document the agreement, including repayment arrangements.
- Do not impose prohibited interest on a loan.
- Treat borrowers with dignity and respect.
- Give genuine hardship cases reasonable time where possible.
- Consider forgiving a debt as an act of charity if you are able.
- Do not use someone’s financial vulnerability as an opportunity for exploitation.
These principles can help Muslims develop healthier financial relationships while remaining faithful to Islamic teachings.
CONCLUSION: MONEY IS TEMPORARY, BUT ACCOUNTABILITY REMAINS
Borrowing and lending money may appear to be ordinary activities, but Islam teaches us that they carry significant moral and spiritual responsibilities.
When you borrow, remember that someone has trusted you with what belongs to them.
When you lend, remember that you have an opportunity to demonstrate kindness and generosity.
When you cannot repay, communicate honestly.
When someone is genuinely struggling, show compassion.
And when you have the means to repay, do not allow procrastination or dishonesty to deprive another person of their rights.
Ultimately, wealth is a trust from Allah. How we earn it, spend it, lend it, borrow it and treat others through it all matter.
A Muslim should never become so attached to money that they forget the importance of honesty, justice, mercy and accountability.
Before you borrow, think about your responsibility. Before you lend, establish clear terms. And whenever money comes between you and another person, remember that Allah sees how you treat His creation.
May Allah protect us from unlawful wealth, free those burdened by debt, grant ease to those experiencing financial hardship and make us people who fulfil our promises and respect the rights of others.
Ameen.
