Is a loan offered by a company to its employees for the purpose of purchasing, building, or expanding a home, which does not exceed fifty times the salary and has a maximum limit of fifty thousand dinars, and is to be repaid over 15 years, with the company charging 10% of its value as administrative fees; is it permissible (halal)?
Taking an increase on a loan is unanimously considered prohibited usury (riba). However, it is permissible for the lending institution to take actual expenses for the loan, administrative expenses, or actual service fees as a wage, provided that these are determined beforehand and are proportionate to the effort expended. It is not permissible for these to be a percentage tied to the loan. If the administrative expenses are tied to the loan, increasing and decreasing with it, then they are prohibited interest and not a wage.
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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