I would like to know if an establishment fee on an interest-free loan is halal?

Question

AsSalamuAlaykum,

The more you borrow the higher the fee. for up $1000 there is no fee and then a $25 establishment fee for every $1000 after that.

Jazakllah

Anas Sharieff Qasmi · Accepted Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

According to the details provided in the query, the establishment fee is not permissible as it falls under the definition of interest. Hence, it is impermissible to apply for such loans. [1]

And Allah Ta’āla Knows Best

Anas Sharieff Qasmi.

Student Darul Iftaa

Hyderabad, India.

Checked and Approved by,
Mufti Ebrahim Desai.

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