What constitutes riba?

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I always understood it as interest. A mechanism that facilitates debt and enables the rich to only get richer and the poor to get poorer

Effectively an exploitation of the poor let alone an undermining of the Islamic emphasis on charity to those in need

Also I don’t know if this is a universal principle but if the lender bears no risk to the exchange whilst the borrower bears all the risk then such a transaction would be a Ribawi one

Riba means “to increase" or “to exceed" and is commonly used in reference to unequal exchanges or charges and fees for borrowing

In the finance context it refers to interest or usury as @Khalil referred to.
In this instance the lender gains REGARDLESS of the outcome of the borrower’s use of the money.

We can see how this is problematic on a macro level since intensives are not aligned

However, I recall that in some cases (not strictly Muslims) referred to usury as exploitative loans (i.e. Payday loans)

Does anyone know if there is any Islamic distinction between the likes of Payday loans and conventional bank loans?

What is a payday loan?

Would conventional bank loans not be exploitative just by the presence of Riba?

Yes, I have learnt it as something that “grows” which connotates to the seem meaning. It is when it grows at a certain rate or at grows at all. But I believe there are conditions for it to be riba and there is a difference between that and interest.

So to my understanding of it, not all interest is riba but all riba is interest. I will give you an example, let us say, we want to buy a phone for £100, but we don’t have that £100, so the seller says, I will charge you £10 a month to buy this phone for a year, he has essentially paid £120 instead. This is INTEREST but it is not riba, because the money is fixed and he agreed to buy it at that fixed rate and for a higher price since he can afford it monthly rather than a full price. So we have to be careful about this.

I see that makes sense. What you’ve described, do you know what time of traditional islamic contract that would be? (e.g. Ijara/Murabaha/Musharakah/Mudarabah? I’m pretty sure it’s not the last two).

i think this is called ‘IIjara’… hopefully I am right lol. What if the company takes out insurance, and ask the person to pay for it, therefore, the can still take responsibility but it is still not their responsibility… does that make sense, would that now be halal ? OR we going to delve into, how insurance is now haram too?

I would love to be able to answer this, I am so lost with wording and titles, I need to go over these terms again before I give you a solid answer. Apologies my brother!

A hadith comes to mind when reading this. Very interesting read:
It was narrated that Muslim bin Yasar and 'Abdullah bin 'Atik said:

“Ubadah bin As-Samit and Muawiyah met at a stopping place on the road. 'Ubadah told them: 'The Messenger of Allah forbade selling gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates”‘- one of them said: ‘salt for salt,"’ but the other did not say it-“unless it was like for like, hand to hand. And he commanded us to sell gold for silver and silver for gold, and wheat for barley and barley for wheat, and to hand, however we wanted.”’ And one of them said: “Whoever gives more or ask for more has engaged in Riba.”’
Grade: Sahih (Darussalam)

Reference : Sunan an-Nasa’i 4560
In-book reference : Book 44, Hadith 112
English translation : Vol. 5, Book 44, Hadith 4564

Payday loans have very high interest rate, especially if you miss a payment

Riba is the transfer of wealth, with the promise of guaranteed returns on top of the original principal transfer.

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The Essenes of the ḥadīth is trade most be like for like, as in you trade value x for value x in the same asset. If the asset is different, it’s possible to bargain a deal. But you cannot do this within the same asset. For example, you can’t have 10gs of gold and bargain and trade it for 15gs.

A pay day loan is when you receive all or part of your salary ahead of time and you pay it back with interest.

It’s a quick short term loan.

These tend to be much more risky than conventional loans, and I’m not sure what the regulation is like for these

I see but what makes them Haram is also what makes conventional loans Haram right I.e. the presence of interest