Is money returned from an usurious loan considered unlawful?
A debtor is not permitted to borrow with interest (riba) to repay debts, unless compelled to do so by a genuine, Sharia-recognized necessity that permits committing a prohibited act to avert severe harm from oneself or one's property. Lawful means for repaying the debt must be sought, and creditors should grant an insolvent debtor respite. If the debtor insists on borrowing with interest and repays his debt, there is no sin upon the creditor for accepting the money, because the prohibition of the money pertains to the borrower's liability, not to the money itself. So, if the money is unlawfully acquired (like through interest), the sin is upon the acquirer, and it is permissible for anyone who receives it through a permissible means to benefit from it.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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