To finance your projects, there are several types of loans, and it is even possible to consolidate loans with collateral. Credit is a subject that raises many questions and controversies among Muslims. Indeed, at the time of the creation of the Quran, the credit system did not yet exist. In other words, the processes were completely different from what happens today. Can we thus define this practice as halal or haram?

Is credit Haram or Halal?

The question arises among Muslims: does credit fall under what is Haram in Islam? The banking system did not exist at the time when the religion was founded, which alludes to several topics of debate among practitioners. Most religious experts stipulate that credit is haram. Based on the principle that interest is not allowed, a Muslim can thus finance a purchase only through a zero-interest loan or by paying in cash.

However, in case of vital necessity or a real need, it is possible to transcend the prohibition. Thus, a loan can be considered as such when it is, for example, a mortgage.

What does the Fatwa Council say?

The European Fatwa Council CEFR stipulates that real estate credit can be halal. However, it must meet certain conditions, namely:

• You must not have housing that meets your needs.
• It must finance a primary residence.
• You must have sufficient resources to finance the property in cash.

As in other religions, different interpretations arise. On one hand, there are those who consider credit to be legal under certain conditions, whether it is a renovation loan or other. On the other hand, there are those who believe that credit is forbidden. Furthermore, it is written nowhere that credit is allowed or forbidden. Additionally, the banking system that existed in the past is very different from what happens today.