Is it haram if you pay interest and what is the punishment?

Answer 1

yes it is haraam

[surah baqarah:275] Those who eat Ribâ[] (usury) will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaitân (Satan) leading him to insanity. That is because they say: "Trading is only like Ribâ (usury)," whereas Allâh has permitted trading and forbidden Ribâ (usury). So whosoever receives an admonition from his Lord and stops eating Ribâ (usury) shall not be punished for the past; his case is for Allâh (to judge); but whoever returns [to Ribâ (usury)], such are the dwellers of the Fire - they will abide therein.

[surah baqarah:278] O you who believe! Be afraid of Allâh and give up what remains (due to you) from Ribâ (usury) (from now onward), if you are (really) believers.

Narrated By Samura bin Jundab :

Whenever the Prophet finished the (morning) prayer, he would face us and ask, "Who amongst you had a dream last night?" So if anyone had seen a dream he would narrate it. The Prophet would say: "Ma sha'a-llah" (An Arabic maxim meaning literally, 'What Allah wished,' and it indicates a good omen.) One day, he asked us whether anyone of us had seen a dream. We replied in the negative. The Prophet said, "But I had seen (a dream) last night that two men came to me, caught hold of my hands, and took me to the Sacred Land (Jerusalem). There, I saw a person sitting and another standing with an iron hook in his hand pushing it inside the mouth of the former till it reached the jaw-bone, and then tore off one side of his cheek, and then did the same with the other side; in the mean-time the first side of his cheek became normal again and then he repeated the same operation again. I said, 'What is this?' They told me to proceed on and we went on till we came to a man Lying flat on his back, and another man standing at his head carrying a stone or a piece of rock, and crushing the head of the Lying man, with that stone. Whenever he struck him, the stone rolled away.

The man went to pick it up and by the time he returned to him, the crushed head had returned to its normal state and the man came back and struck him again (and so on). I said, 'Who is this?' They told me to proceed on; so we proceeded on and passed by a hole like an oven; with a narrow top and wide bottom, and the fire was kindling underneath that hole. Whenever the fire-flame went up, the people were lifted up to such an extent that they about to get out of it, and whenever the fire got quieter, the people went down into it, and there were naked men and women in it. I said, 'Who is this?' They told me to proceed on. So we proceeded on till we reached a river of blood and a man was in it, and another man was standing at its bank with stones in front of him, facing the man standing in the river. Whenever the man in the river wanted to come out, the other one threw a stone in his mouth and caused him to retreat to his original position; and so whenever he wanted to come out the other would throw a stone in his mouth, and he would retreat to his original position. I asked, 'What is this?' They told me to proceed on and we did so till we reached a well-flourished green garden having a huge tree and near its root was sitting an old man with some children. (I saw) Another man near the tree with fire in front of him and he was kindling it up. Then they (i.e. my two companions) made me climb up the tree and made me enter a house, better than which I have ever seen. In it were some old men and young men, women and children.

Then they took me out of this house and made me climb up the tree and made me enter another house that was better and superior (to the first) containing old and young people. I said to them (i.e. my two companions), 'You have made me ramble all the night. Tell me all about that I have seen.' They said, 'Yes. As for the one whose cheek you saw being torn away, he was a liar and he used to tell lies, and the people would report those lies on his authority till they spread all over the world. So, he will be punished like that till the Day of Resurrection.

The one whose head you saw being crushed is the one whom Allah had given the knowledge of Quran (i.e. knowing it by heart) but he used to sleep at night (i.e. he did not recite it then) and did not use to act upon it (i.e. upon its orders etc.) by day; and so this punishment will go on till the Day of Resurrection. And those you saw in the hole (like oven) were adulterers (those men and women who commit illegal sexual intercourse). And those you saw in the river of blood were those dealing in Riba (usury). And the old man who was sitting at the base of the tree was Abraham and the little children around him were the offspring of the people. And the one who was kindling the fire was Malik, the gate-keeper of the Hell-fire. And the first house in which you have gone was the house of the common believers, and the second house was of the martyrs. I am Gabriel and this is Michael. Raise your head.' I raised my head and saw a thing like a cloud over me. They said, 'That is your place.' I said, 'Let me enter my place.' They said, 'You still have some life which you have not yet completed, and when you complete (that remaining portion of your life) you will then enter your place.'"

[Sahih Bukhari, Book of Funerals]