Does Islam forbid interest bearing loans?

Answer 1

No, this is nothing but a kind of usury which is strictly prohibited in Islam. changing the names does not change the fact. so, let the name be interest or whatever it's still usury & this is forbidden in Islam. Usury has many bad effects. for instance, it causes oppression, it increases the wealth of the rich & the poverty of the poor which leads to a damage in the economical system of the community due to creating a huge gap between poor & rich, it causes conflicts & hatred between people & it's enough that God, the Creator forbids it.

Only one example:

(Allah will deprive usury of all blessing, but will give increase for deeds of charity: For He loveth not creatures ungrateful and wicked).

Holy Quran,(2:276).

Answer 2

Only interest free loan is allowed. Usury and interest is NOT ALLOWED (HARAM) in Islam.

________________________________________________

According to some Islamic Fatwa, it is possible to borrow money from a bank with interest. They consider that this interest covers the cost of loan processing and that the banks are forming some kind of solidarity that helps in avoiding losses. On the other hand they consider that the value of money is not fixed and usually tends to decrease so the interest compensates for this decrease in money value.

Answer 3

Islam absolutely prohibits financial transactions involving interest.

Answer 4

No. All forms of Interest i.e. Riba in Arabic - are forbidden i.e. Haraam in Islam.