On what conditions are monetary penalties for late payment halal?
By Faisal Amjad

Can I charge a 'late fee' if payment is not made on time?

Published in: Wealth
Date: 28 / 07 / 19

This is not halal. There is no such thing in Islam. Rather there is such a thing as a security that you deposit with the lender. In case of failure to return the loan, the lender would sell the security deposit and take his money back from the sale. He could sell it at a higher price and profit from the sale too. 

Faisal Amjad

About the author

A lifelong learner, avid reader and passionate writer, I am the founder of KNOW and a serial entrepreneur.
I am a huge believer in personal development and am also the co-founder of Muslim CEO.

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