The Ruling on Late Fees / Fines / Penalties

*Salaamun 'alaykum wa rahmat-ul-lahi wa barakātuh* 

```Shaikh Sālih Al-Fawzān — The Ruling on Late Fees / Fines / Penalties```

_In the name of Allaah, the Entirely Merciful, the Especially Merciful, and may peace and blessings be upon the Messenger of Allaah (ﷺ) ._

*Question: In buying and selling — if a person buys something from someone, or sells somebody an item agreeing to be repaid at a specified later date — is it permissible to stipulate a conditional penalty? So if the person is late to pay at the specified time, the repayment amount is increased. What is the ruling of this action?*

_🎙️Shaikh Sālih Al-Fawzān (may Allāh preserve him) answered:_

*“This is the Ribā (usury) of Jāhiliyyah (pre-Islamic ignorance) and it is not permitted. If the debtor did not make the payment of the debt when the payment date came around, his debt would be increased, and his timeframe to repay would be extended [in exchange]. That is the usury of Jāhiliyyah. Those who say: either you make the payment [now], or you pay more [later]. So they increase the amount of the debt, and they annul that repayment date. And Allāh (ﷻ) has forbidden that, and threatened to punish it with the most severe punishment.*

If the repayment date comes around, and the debtor is able to pay (mūsir), then he must pay it off. And if he refuses, then he is forced to repay — such that it can reach the stage where the ruler has to intervene, and take his wealth from him and pay off his debt.

This is due to the saying of the Messenger (ﷺ) who said: *‘The delaying of repayment (layy) for the one who possesses the wealth (wājid) desanctifies his honour, and makes permissible his punishment.’*

The ‘wājid’ is the wealthy one, and ‘layy’ is to delay.

If he is unable to pay (muʿsir) however, then it is obligated to wait [‘till he is able], without increasing his debt, due to the saying of He (the Most High):

وَإِن‭ ‬كَانَ‭ ‬ذُو‭ ‬عُسْرَةٍ‭ ‬فَنَظِرَةٌ‭ ‬إِلَىٰ‭ ‬مَيْسَرَةٍ

*‘And if the debtor is in a hard time (has no money), then grant him time ‘till it is easy for him to repay.’*

— Sūrah Al-Baqarah (2): 280

Naʿam.”

*Translator’s Note 📝*

With the sudden proliferation of “Buy now, pay later” and “Pay-in-3” services hitting the market such as Klarna, PayPal Pay Later, Tamara (and others), some people have become confused regarding the permissibility of using such services due to misleading claims such as:

* Shariah-compliant

* Interest-free

* No hidden fees

* etc.

*May Allaah accept our ibaadat and forgive our shortcomings.*

_❞Keep Reminding, for Indeed the ʀᴇᴍɪɴᴅᴇʀ ʙᴇɴᴇꜰɪᴛs ᴛʜᴇ ʙᴇʟɪᴇᴠᴇʀ ❝_