Taking a loan with a slight interest is permissible, and there is nothing wrong with it because the difference in interest is consumed by inflation and administrative expenses. The prohibited interest in taking a loan is that which arises from exploitation. However, if it is by mutual agreement, then there is no objection to it. The Prophet himself paid off his debts with an increment at times, as in the story of the camel and as in the story of Zayd ibn Sa῾nah.

Fatwa issued by Dr. Khālid Naṣr