Question ID: #4421
Question: Are these fixed-fee loan terms halal or shariah compliant?

I am a therapist and have started my own practice. Alhamdulillah I can finally sustain my monthly business costs but growth is slow as I do not have enough capital to advertise/expand to at least contribute to my personal financial targets. I'm facing either further investment into my business (via a loan) or closure. I have been offered a loan with a "fixed fee" and these are the known terms: 1) The fixed fee is a percentage of the loan amount (10% or less); 2) The actual loan amount and fixed fee will vary (based on loan amount) but there is no interest rate, no other costs after the loan is disbursed; 3) The loan must be repaid within a specified time-frame (e.g., 1 year). Is this loan truly interest-free and/or halal?
Answered by: Ulamaa ID 04 (London)
Date: 17/03/2020 00:17am

بسم الله الرحمن الرحيم

الجواب حامداومصليا

There is an element of Haram in this arrangement such as the fixed fee etc. So one must abstain from this.

And Allah knows best

22 ٍRajab 1441/ 17 March 2020

Mufti Qamruzzaman

London, UK