Q. I know that interest based loans are Haraam but what if the interest rate is fixed? Is it still Haraam?
A. Interest bearing loans are Haraam irrespective if the interest rate is fixed. As an example, if A took and loan of R100 form B on the condition that A returns R150 to B on a fixed interest rate of 10 % monthly or annually, it will constitute interest and it will be Haraam. This is simply because A returns R50 in excess of R100 which is interest and not because the interest rate is fixed. Hence, in this case, the fixture of the interest rate will not affect the nature of it being Haraam in any way.
Allah Ta’ala Knows Best
Mufti Ismaeel Bassa