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Riba al-Dayn


Interest that is earned on lending money to another party (or interest that is paid on borrowing money from another party). This interest (riba) appears in debts (duyun– plural of dayn) as a percentage or a fixed amount added to the principal amount of debt (asl al-dayn). It is the most commonplace and most debated type of interest. In general, riba al-dayn is any excess or additional benefit charged or paid as consideration in a lending/borrowing transaction. Shari’a strictly prohibits all types and sources of riba, including riba al-dayn. An example of riba al-dayn is the transaction in which one party pays $12,000 after one year for an amount of $10,000 received today. Riba al-dayn may take so many forms including: an amount of money, some benefit or service (rendered in association to a lending transaction), and so on.

Riba al-dayn is Arabic (ربا الدين) for usury in debts.



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