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07 / 05 / 2026
The Penalty for Paying Off Debt
I want to take an educational loan to pay for university fees from Jordan Bank, an interest-free loan that is 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 absolutely no penalty. Is this permissible or does it count as 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 they abandon this penalty clause. And God knows best.
