---
title: "What Is Riba (Interest)? | Islam Is Mercy"
description: "Riba means interest or usury — a guaranteed increase charged on a loan. Islam forbids it and encourages fair trade and shared risk instead."
lang: en
url: https://islamismercy.com/en/glossary/riba/
---

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3.  What Is Riba (Interest)?

# What Is Riba (Interest)?

Written by **Islam Is Mercy Editorial Team**· 1 min readAwaiting scholar review

## The short answer

Riba is usually translated as interest or usury: an extra amount charged for lending money, guaranteed regardless of what happens to the borrower. The Qur'an permits trade but forbids riba, because it lets wealth grow at the expense of people in need. Islamic finance seeks fair alternatives based on trade and shared risk.

## On this page

1.  Meaning
2.  How Muslims use it
3.  Example

**Riba** (Arabic: ربا) is pronounced *RI-ba*.

## Meaning

The word literally means *increase* or *growth*. In Islamic law, *riba* mainly refers to any guaranteed extra amount a lender demands in return for a loan — what English calls interest or usury. The Qur’an draws a sharp line between the two ways of making money: God has permitted trade and forbidden riba (Qur’an 2:275). In trade, both sides take a risk and exchange real value; in riba, the lender’s profit is fixed, while the borrower carries all the risk.

Islam is not alone in this. The Torah forbids charging interest to a poor fellow Israelite (Exodus 22:25), and for centuries Christian teaching condemned usury too. The concern is the same: lending should help people in need, not trap them in debt.

## How Muslims use it

Muslims try to avoid paying or receiving interest, for example in loans, mortgages and savings accounts. Islamic banks offer alternatives such as profit-sharing partnerships, leasing and cost-plus sale contracts. Muslim scholars agree that riba is forbidden, but they discuss how it applies to some modern financial products and to Muslims living where interest-free options are limited — see [Where Muslims Differ](https://islamismercy.com/en/core/where-muslims-differ/). Islam also strongly encourages generous, interest-free loans to friends and neighbours who are struggling.

## Example

*“They saved for a few more years so they could buy their home with an Islamic mortgage and avoid riba.”*

For the bigger picture, read [Wealth and Money in Islam](https://islamismercy.com/en/views/wealth-and-money/).

## Key takeaways

-   Riba means a guaranteed increase charged on a loan — interest or usury.
-   The Qur'an permits trade but forbids riba.
-   Islamic finance offers alternatives based on trade, partnership and shared risk.

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