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Fatwa CenterGiving charity is better than lending
Question
How does the great Sharee‘ah organize the relationship between the lender and the borrower (I mean with regards to individuals not entities)? I noticed that some brothers borrow money frequently –I try to prohibit them – and they say that the dirham of a loan is better than that of charity. Is that true? Is it better for me to lend a person than to give him the same amount in charity? On the other hand, our Prophet, sallallaahu ‘alayhi wa sallam, sought refuge with Allaah The Almighty from debts and sins. Please clarify and elaborate.
Answer
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.
It is permissible for one to borrow if he knows that he can repay the debt. However, a Muslim should not take lightly the matter of borrowing for the least reasons. It was narrated that the Prophet, sallallaahu ‘alayhi wa sallam, was strict concerning debts with regards to the borrower. Muhammad ibn Jahsh 
said: “We were sitting with the Messenger of Allaah, sallallaahu ‘alayhi wa sallam, in the yard of the Masjid where funerals take place when he raised his head towards the sky, then he looked down, put his palm on his forehead and said: “Glory be to Allaah! Glory be to Allaah! What a strict issue has been revealed to me!” We remained silent for a day and a night and were afraid. The following morning, I asked him: “O Messenger of Allaah, what is this strict issue that has been revealed?” He, sallallaahu ‘alayhi wa sallam, said: “It is about debt. By the one in whose hand is the soul of Muhammad, if a man were killed in the Cause of Allaah, then brought back to life, then killed in the Cause of Allaah then brought back to life again, and he owed a debt, he would not enter Paradise until his debt was paid off.” [Ahmad] ‘Uqbah ibn ‘Aamir narrated that the Prophet, sallallaahu ‘alayhi wa sallam, said: "Do not frighten yourselves after security!" They asked: "What does that mean, O Messenger of Allaah?” He said: "That is debt." [Ahmad] ‘Aa’ishah 
narrated that the Messenger of Allaah used to invoke Allaah in the prayer saying: "O Allaah, I seek refuge with you from all sins, and from being in debt." Someone said: “O Messenger of Allaah! You seek refuge with Allaah from being in debt quite often.” He replied: "If a person is in debt, he tells lies when he speaks, and breaks his promises when he promises." [Al-Bukhari and Muslim] There is no doubt that these are two of the qualities of the hypocrites. The Muslim should keep away from whatever leads him to possess their qualities. Lending is not better than giving charity with respect to the lender. Rather, charity is better than lending regarding him. Allaah The Almighty Says (what means): {And if someone is in hardship, then [let there be] postponement until [a time of] ease. But if you give [from your right as] charity, then it is better for you, if you only knew.} [Quran 2:280] Imaam Al-Jassaas 
said: "This means, and Allaah The Almighty Knows best, that giving the debt due from the insolvent person in charity to him is better than postponing it. This indicates that giving charity is better than lending because lending is giving money and delaying taking it back. It was narrated that the Prophet, sallallaahu ‘alayhi wa sallam, said: "Lending twice is like giving charity once." On the other hand, it was narrated that the Prophet, sallallaahu ‘alayhi wa sallam, said: "I saw on the night journey a door to Paradise on which the following was written: Charity is repaid tenfold, and a loan eighteenfold. I said: O Jibreel (Gabriel), how can a loan be more meritorious than charity? He replied: Because one asking for charity may still have some resources left, while the borrower does not borrow unless his basic needs are not fulfilled." [Ibn Maajah] This is a weak Hadeeth. Al-Kinaani said: "This chain of narrators is weak." Al-Albaani said: "It is very weak." An-Nafraawi who is a Maaliki scholar, said: "It is adopted that giving charity is better than lending because the giver of charity takes nothing instead unlike the lender." Concerning the borrower, if he is sure that he can repay the debt, there is no doubt that borrowing is better than asking for charity because this saves his dignity from the humiliation of begging. The Messenger of Allaah, sallallaahu ‘alayhi wa sallam, said: "A man keeps on asking others for money till he comes on the Day of Resurrection to meet Allaah The Almighty without any piece of flesh on his face." [Al-Bukhari and Muslim]
Allaah Knows best.
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