Get to know the different types of usury so you can avoid them
Riba is a term that may be familiar to your ears. In buying and selling transactions, of course as a seller expects maximum profit. However, if the amount exceeds the limit, it will be unlawful.
What is Riba?
The definition of usury is a provision of additional value by exceeding the nominal amount of the loan when it is repaid. The amount of interest refers to a certain percentage charged to the borrower.
Etymologically (language), in Arabic usury is an excess or addition (az-ziyadah). As for these advantages, generally include all additions to the principal value of debt and assets.
Meanwhile, in terms of terminology (the meaning of the term), the notion of usury is the additional value or payment of debt that exceeds the amount of receivables and has been predetermined by one of the parties.
Legal Basis of Riba
Riba is one of the things that is strictly prohibited in Islam. In the Qur’an and Hadith it has been determined that the legal basis of usury is clearly forbidden. Here is the full explanation.
Islam strictly forbids its people to carry out buying and selling transactions and accounts payable if it contains usury. The prohibition is also written in several verses of the Koran. Among them are Surah Al-Baqarah verse 276, Surah Al-Baqarah verse 278, Surah An-Nisa verse 161.
Kinds of Riba
In trading according to Islamic law, usury is divided into five types, namely usury fadhl, usury yad, usury nasi’ah, usury qardh, and usury jahiliyah. Here is the full explanation.
Riba Fadhl
Riba is the activity of buying and selling transactions or the exchange of goods that produce usury, but with different amounts or doses.
An example of this type of usury is exchanging IDR 100,000 with IDR 2,000 denominations, but the total is only 48 pieces, so the nominal amount of money given is only IDR 96 thousand. It also exchanges 24 carat gold to 18 carat.
Riba Yad
In this type, usury is the result of buying and selling transactions and also the exchange of goods that produce usury and non usury. However, the time for the handover of the two goods was delayed.
An example of riba yad in everyday life is the sale of motorbikes at a price of Rp. 12 million if paid in cash and Rp. 15 million through credit. Neither the buyer nor the seller determines the amount to be paid until the transaction ends.
Riba Nasi’ah
Riba is the excess obtained from the process of buying and selling transactions with a certain period of time. The transaction uses the same two types of goods, but there is a delay in payment.
An example of usury nasi’ah is the exchange of 24 karat gold by two different parties. When the first party has handed over the gold, but the second party says it will give his gold within one month. This becomes usury because the price of gold can change at any time.
Riba Qardh
In the type of qardh, usury is the additional value generated as a result of returning the principal debt with several requirements from the lender. An example of usury in everyday life is the loan of Rp. 100 million by moneylenders, but accompanied by 20% interest within 6 months.
Riba Jahilliyah
Riba is an additional or excess amount of debt repayment that has exceeded the principal of the loan. Usually, this happens because the borrower cannot pay it on time according to the agreement.
An example of jahiliyah usury is a loan of Rp. 20 million rupiah with a repayment period of 6 months. If you can’t pay it on time, there will be additional debt from the total loan.
How to Avoid Riba
Riba is an obligatory act for you to avoid in everyday life, especially for a Muslim. Here are some tips that will help you in preventing usury.
Understanding the Dangers of Riba
In the Qur’an, namely in the letter An-Nisa verse 161, it has been explained that Allah SWT will reward those who eat usury results, because the money is obtained in a bad way.
Transferring Savings to a Sharia Bank
Diverting your savings and credit to a sharia bank that has obtained a NSC (National Sharia Council) fatwa can be one way to avoid usury. The reason is, with regulations in accordance with Islamic law, there is little possibility of usury happening.
Always be thankful
Generally, the cause of usury is a lack of gratitude for what you already have. In fact, applying the nature of always being grateful will prevent you from wanting to live a luxurious and consumptive life through debt or usury.
Well, that’s a description of the meaning of usury, its types and laws in Islam. Avoid the practice of usury and start using Islamic financial institutions. If you are interested, currently OCBC has provided a Tanda iB savings service that will manage finances according to Islamic law. Let’s open an account now!
