Many social problems result from loans because many people overlook the etiquettes which Islam legislated for the debtor and the creditor, and should the debtors and the creditors adhere to such etiquettes, then many problems would be solved.

Some of these etiquettes regarding the creditor are to delay the debtor who is unable to pay on due time and to drop the debt from the needy. On the other hand, the debtor should rush and repay the loan as soon as he is able to and not to procrastinate repayment.

Giving respite to the debtor:

When the time of repayment is due, then the one who was kind to his brother and loaned him some money should remember the saying of Allah (which means): “And if someone is in hardship, then [let there be] postponement until [a time of] ease. But if you give [from your right as] charity, then it is better for you, if you only knew.” [Quran 2: 280] In this verse, Allah enjoins patience and tolerance for the one who is poor and cannot repay on time and that the creditor should postpone the deadline. This command came to change the old practice during pre-Islamic era were the creditor used to say to the debtor: “Either you pay or I start calculating interest on the loan”. Also, the verse comes directly after the verses addressing the issue of Ribaa (i.e. interest and usury) in which Allah Says (what means): “O you who have believed, fear Allah and give up what remains [due to you] of Ribaa (i.e. interest and interest), if you should be believers. And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal-[thus] you do no wrong, nor are you wronged.” [Quran 2: 278-279]

It is a known fact that the world’s main economical problems resulted from Ribaa (usury and interest) and dealing with it. This caused hunger and poverty amongst people in countries which were (at a given time) rich countries and its people were rich, but the promise of Allah came true in which he threatens those who deal with Ribaa (which means): “And if you do not, then be informed of a war [against you] from Allah and His Messenger.” [Quran 2: 279]

Allah did not specify the type of war He would wage against those who deal with Ribaa; whether it is in the form of afflicting them with diseases, making them suffer famine and poverty or a military war.

Jaabir, may Allah be pleased with him, reported that the Messenger of Allah  said: “May Allah show mercy to a man who adopts a kind attitude when he sells, buys and demands for the repayment of loans.” [Al-Bukhari] This person deserved the mercy of Allah because he dealt with people kindly and postponed the one who could not repay him and whenever asked for his money, he demanded it gently with kind words as not to heart the feelings of the debtor.

These prophetic narrations deeply affected the companions, may Allah be pleased with them, and they acted upon them. ‘Abdullaah the son of Abu Qataadah, may Allah be pleased with him, reported: “My father (i.e. Abu Qataadah) went to a man who was indebted to him, so the debtor hid from Abu Qataadah. Later Abu Qataadah saw the debtor and requested his money but the later informed him that he could not repay him because he did not possess the money and that his financial situation was very tight. Upon hearing this, Abu Qataadah, asked the man saying; `Are you really in a tight situation?` the man responded with the affirmative. Thereupon my father said: I heard the Messenger of Allah  saying: “He who likes Allah to deliver him from the calamities of the Day of Resurrection, let him either give respite to a debtor or grant him remission (of loans) in straitened circumstances.” Then he cried.” [Muslim]

In another narration he  said: “He who gives respite to someone who is in straitened circumstances, or grants him remission, Allah will shelter him in the shade of His Throne, on the Day of Resurrection, when there will be no shade except its shade.” [At-Tirmithi]

Abu Qataadah, may Allah be pleased with him, was not the only one who behaved in such a manner. Rather, this was the way the entire community of the companions, may Allah be pleased with them, dealt with each other.

Many of the Companions, may Allah be pleased with them, delayed the debtors who could not pay on time for long periods, and in many cases they even dropped and waived the entire debt altogether.

This was so because they lived the prophetic narrations practically in their lives. Some of them used to lend others just to get the reward mentioned in some narrations like the saying of the Messenger of Allah : “Any Muslim who lends another Muslim twice will get a reward as if he has spent this money in charity.” Another narration that was an encouraging factor is the saying of the Messenger of Allah : “He who gives respite to someone who is in straitened circumstances, will get a reward as if he has spent this amount in charity for every day he delays him until its due date, and after it becomes due he will get double such reward.”

Giving respite and delaying those in tough situations can be the reason of rescuing oneself from Hell. Abu Hurayrah, may Allah be pleased with him, reported that the Messenger of Allah  said: “There was a person who used to loan money to the people and he used to say to his servant: `When an insolvent person comes to you, show him leniency so that Allah may forbear our faults.' So when he met Allah (i.e., when he died), Allah forgave him.” [Al-Bukhari & Muslim]

Abu Mas`ood Al-Badri, may Allah be pleased with him, reported that the Messenger of Allah  said: “A person from amongst the people who lived before you was called to account by Allah on the Day of Resurrection. No good deeds were found in his credit except that he being a rich man had (financial) dealings with people and had commanded his servants to show leniency to those who were in straitened circumstances. Upon this Allah, the Exalted, and Majestic said: `I am more entitled to this attribute, so waive (his faults).`” [Muslim]

The abovementioned narrations and verses are a great encouragement for the creditor to postpone and give respite to the debtors who can not repay on time due to their strenuous situations. They are messages to the rich who lend others and embarrass them and humiliate them, and may even be the cause for their imprisonment. Indeed, the creditor has the right to do so, but Allah Says (what means): “… But whoever pardons and makes reconciliation his reward is [due] from Allah …” [Quran 26: 40] Undoubtedly, the reward from Allah is far better than money which is an interim pleasure.

Repaying the creditor on time:

The debtor should take initiative to repay the creditor as soon as the loan is due. If the debtor is financially unable to repay it all, then at least he should start paying in installments if he possesses the money to do so. One should rush in repayment, because loans will be a hard thing on him in his gave.

The debtor should repay in the best manner. Abu Hurayrah, may Allah be pleased with him, reported: “A harsh Bedouin came to the Messenger of Allah  asking him to repay a young camel he  had borrowed from this Bedouin. The Bedouin used harsh words when he was demanding his money, so the companions were about to strike him for doing so, but the Messenger of Allah  said: 'Leave him! Indeed a creditor has the right to demand it (i.e. his loan).' The companions could not find a young camel among the brought ones (from Zakah) to match the level of that which was borrowed, and informed the Messenger of Allah  that all the camels were of the best type. The Prophet  said: 'Give it to him, for it is the best of all people who pays back in the best manner.' [Muslim] In another narration narrated by Abu Sa’eed, may Allah be pleased with him, the Prophet  told the companions, may Allah be pleased with them, who were enraged with the Bedouin: "You should side with the one who is demanding his right."

When the Bedouin saw the good manner in which the Prophet  repaid him, he thanked him, and thereupon the Prophet  said: “These are the best type of people (i.e. who repay in the best manner). There is no good in a nation whose poor cannot take their rights from their rich without being harassed.” The Prophet  said this because sometimes the poor might get his right back but only after he suffers and is delayed and is put in embarrassing situations.

Additionally, the debtor must rely on Allah in his attempt to repay the creditor. Abu Hurayrah, may Allah be pleased with him, reported that the Messenger of Allah  said: “A man from the children of Israeli asked another to lend him one thousand Deenaars. The second said, `I want a surety witness’ the former replied, `Allah is sufficient as a surety witness’ The second said, you are right, and he lent him the money for an appointed time. The debtor went across the sea, and when he finished his job, he searched for a conveyance so that he might reach in time for the repayment of the debt, but he could not find any. So, he took a piece of wood, made a hole in it, inserted in it one thousand Deenaars and a letter to the lender and then closed (i.e. sealed) the hole tightly. He took the piece of wood to the sea and said: “O Allah! You know very well that I took a loan of one thousand Deenaars from so-and-so. He demanded a surety from me but I told him that Allah’s Guarantee was sufficient, and he accepted Your Guarantee. He then asked for a witness and I told him that Allah was sufficient as a witness, and he accepted You as a witness. No doubt, I tried hard to find a conveyance so that I could pay his money but I could not find any, so I hand over this money to You” Saying that, he threw the piece of wood into the sea till it went out far into it, and then he went away. Meanwhile he started searching for a conveyance in order to reach the creditor’s country.

This is the consequence of relying on Allah, and when one’s intention is sincere in repayment, then Allah will assist him in his attempt. The problem that faces many indebted people is that they are not truly sincere in their intention to repay the debt to the creditor and thus they become deprived of the assistance of Allah.

Late salaries:

This is one type of debt which the employer owes the employee. Some people might work for a certain period and their contract is terminated and they leave the country whilst the employer owes them part of their salaries that he did not pay them. Undoubtedly, this is a debt on the part of the employer and he must look for them if they leave before he fulfilled their payments or salaries, even if he has to travel to their countries in order to pay them off.  

The following narration indicates the greatness of the right of the employee; `Abdullaah bin `Umar, may Allah be pleased with him, narrated that he heard Messenger of Allah  as saying: "Three men, amongst those who came before you, set out until night came and they reached a cave, so they entered it. A rock fell down from the mountain and blocked the entrance of the cave. They said: `Nothing will save you from this unless you supplicate to Allah by virtue of a righteous deed you have done.`” The Messenger of Allah  mentioned what each of them said and one of them said: “`O Allah! I hired some laborers and paid them their wages except one of them departed without taking his due. I invested his money in business and the business prospered greatly. After a long time, he came to me and said: O slave of Allah! Pay me my dues. I said: All that you see is yours - camels, cattle, goats and slaves. He said: O slave of Allah! Do not mock at me. I assured him that I was not joking. So he took all the things and went away   he spared nothing. O Allah! If I did so seeking Your Pleasure, then relieve us of our distress.` The rock slipped aside and they got out walking freely.” [Al-Bukhari & Muslim]

Nowadays, employers oppress their employees and eat up their rights and salaries … but the right of these employees will not be wasted with Allah, and their oppression will not be left unattended even if they die before getting their rights, because there will come a Day when everything will be accounted for and then repayment will be in a different form … it will be in rewards from their records. Therefore, employers are advised to rush and fulfill the payment for their employees before that Day comes.

Procrastinating payment:  

Some debtors delay and procrastinate for no need even when they have the money to repay, but he acts so mean and low and pays back in installments to the creditor. One might have a debt of fifty thousand for example, and starts repaying five hundred every month, other months he might pay only two hundred, and a third month he would pay a thousand and so on, despite him having the entire amount, but he just wants the creditor to give up on him and his debt, and this is extreme stinginess.

Such people make the creditor appear like the poor person who is chasing after money, whilst it is his right. He forces him in some cases to beg him to repay, so that he (i.e. the creditor) can fulfill his own obligations which he might have arranged their payment based on the agreed upon promise of repayment from the debtor.

Finally, it is recommended that the debtor says nice words of gratitude to the creditor upon repaying him as this softens the heart and encourages the creditor to loan others in the future.