Fatwaa.net - Fatawa | I want to take an educational loan to pay for university fees from the Jordan Bank, and the loan is interest-free, a benevolent loan, to be repaid over the course of a year. However, there is a condition: if I delay in paying the monthly installment, I will incur a penalty of ten dinars. If I pay on time, there is no penalty at all. Is this condition permissible or is it considered usury?

6505

01 / 07 / 2026

The Penalty for Delaying Debt Payment

Question

I want to take an educational loan to pay for university fees from the Jordan Bank, and the loan is interest-free, a benevolent loan, to be repaid over the course of a year. However, there is a condition: if I delay in paying the monthly installment, I will incur a penalty of ten dinars. If I pay on time, there is no penalty at all. Is this condition permissible or is it considered usury?

Answer

I say, and with God's help: the penalty clause in debts is not permissible; it is a type of usury. This contract is not valid unless this penalty clause is removed. And God knows best.

The Penalty for Delaying Debt Payment

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