Is it permissible to take a loan from a company that grants interest-free loans, given that there is a clause in the contract stipulating an annual deduction for insurance (to cover death, disability, and potential bankruptcy), knowing that this clause is not enforced in reality and the company considers it a formality?
Source: FtawySummary from Ftawy's records · added here Sep 2, 2026
There is no objection to taking a benevolent loan () from the company if it does not involve the payment of unlawful usurious interest. This is not affected by the condition of insuring the debt by deducting a small amount, because debt insurance is among the permissible guarantees. It is only prohibited if it is a forbidden commercial insurance. The fact that the mentioned condition is nominal and not activated does not affect the transaction.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/171997
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 171997
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy