A funeral procession (Janazah) of a deceased person was brought to the Prophet (ﷺ) so that he might lead the funeral prayer.
At that moment, the Prophet (ﷺ) asked, “Did this deceased person leave behind any unpaid debt?”
The people replied, “Yes! He has a debt upon him.”
The Prophet (ﷺ) asked again, “Did he leave behind any wealth to clear his debt?”
The people replied, “No.”
The Prophet (ﷺ) said, “In that case, you perform the funeral prayer for him your selves (meaning, I will not lead the prayer),” and he began to leave.
Seeing this situation, Hazrat Ali (RA) said, “O Messenger of Allah! I take responsibility to clear the debt of this deceased person!” After that, the Prophet (ﷺ) led the funeral prayer for that Janazah.
— Sharh al-Sunnah
Allah Almighty permitting humans to borrow loans is a manifestation of His immense grace. However, the borrower must adhere to the stipulated conditions. Otherwise, debt will become a major obstacle, preventing entry into Paradise.
- Loans should be taken only for essential needs. Borrowing money for luxurious expenses is forbidden (not permissible).
- When borrowing money, there must be a firm intention to repay it.
- One must not make the lender wander around to get their money back after having wandered around oneself to secure the loan from them.
- Documenting the transaction when borrowing a loan is a law stated by Allah in the Quran.
If a mindset arises that “I will return the debt if the lender asks for it, otherwise I will just leave it as it is,” one must understand well that they cannot enter Paradise. No matter how lofty the good deeds a person has performed, debt will become an obstacle in the Hereafter.
On the Day of Judgment (Qiyamah), no human will possess money or wealth. If a lender complains to Allah in the Hereafter, Allah will command the debtor to settle the debt. On that day, due to the absence of money, the good deeds of the debtor will be transferred to the lender.
We tend to think of debt only as money. However, a promise made to someone and a trust (Amanah) kept by someone are also forms of debt. The debt incurred through money, the debt incurred through promises, and the debt incurred through trust will appear before him in the grave (Qabr) and on the Day of Resurrection (Mahshar), demanding to be fulfilled. Until he fulfills them, he will not enter Paradise.
Borrowing and lending money on interest (Riba) is a forbidden (Haram) act. The Prophet (ﷺ) said:
“Every sin of a martyr (one who sacrificed his life in the path of Allah) will be forgiven, except debt.”
— Muslim
The importance of debt can be understood from the fact that the Prophet (ﷺ) would not lead the funeral prayer for a debtor or a hypocrite (Munafiq). The religion also states that lending money to those in distress is itself a form of charity (Sadaqah).
The Prophet (ﷺ) said:
“Helping someone by giving a loan falls under charity. Furthermore, if someone asks for a loan for legitimate needs, give it to him. It yields a greater reward than charity. In giving charity, there are ten rewards, but by giving a loan, there are eighteen rewards.”
— Tirmidhi
A person who borrows unnecessarily for luxury or wastefulness will certainly face immense difficulty in repaying it. The reason is that if a human desires luxury that the Creator dislikes, he removes himself from Allah’s protection.
Allah says in the Quran:
إِنَّ الْمُبَذِّرِينَ كَانُوا إِخْوَانَ الشَّيَاطِينِ
“Indeed, the wasteful are brothers of the devils.”
— Surah Bani Isra’il: 27
A person who borrows a loan with the intention of not returning it is like a thief. A person with good intentions will receive divine help. Islam outlines separate duties for both the lender and the borrower.
The Prophet (ﷺ) said:
“Whoever is gentle in lending and buying/selling, his soul will be taken gently.”
— Muslim
The lender should treat the borrower with gentleness, keeping their situation in mind. They must not coerce or humiliate them. They should act with a compassionate mindset and give respite to a poor debtor. If a time comes when the debtor falls into a state of poverty and is unable to repay, forgiving his debt is most virtuous.
The Prophet (ﷺ) said:
“Whoever gives respite to a poor debtor or waives his debt, Allah Almighty will grant him a place under the shade of His Throne (Arsh) in the Hereafter.”
— Tirmidhi
Regarding the manner in which a borrower should behave, the Prophet (ﷺ) said:
“The best among you are those who repay their debts in the handsomest manner.”
Furthermore, the Prophet (ﷺ) said:
“Procrastination (delaying repayment) by a person who has the means to pay justifies the defaming of his honor and his punishment.”
— Abu Dawud
Whenever the lender comes asking for the debt, the borrower must behave with gentleness and in a manner that gives satisfaction. The warning that “Allah does not forgive a person who dies as a debtor” is something we must heed carefully.