Who is responsible for all additional charges incurred when taking a loan?

Q. A friend is in need and has asked me to loan him R1 Million Rand. I have agreed but I will have to make a withdrawal from my bank account. When he pays me back, is he responsible to pay me back the loan amount of R1 Million Rand plus the bank charges of R20 000 for making the withdrawal?

A. As a general rule, the debtor is responsible for all costs directly related to the processing of the debt with the creditor, whether it is the drawing up of a loan agreement or bank processing fees.

Thus, in the enquired case, your friend (the debtor) is responsible in repaying the full amount of the loan [i.e. the R1 Million including the bank charges of R20 000] to you (the creditor). (Muheet 6/303 – Fataawa Darul Uloom Zakariyya 5/509/510)

Allah Ta’ala Knows Best

Mufti Ismaeel Bassa