Is it permissible to pay off interest with interest money? e.g one uses interest money received from the bank to pay off interest on borrowed money from loan company.
بسم الله الرحمن الرحيم
Paying interest is prohibited just as taking it; hence it is not permissible to take out any sort of loan on interest. One should make sincere tawbah (repent) for taking out these sort of loans.
Jabir ( may Allah be pleased with him) said that Allah’s Messenger (ﷺ) cursed the accepter of interest and its payer, and one who records it, and the two witnesses, and He (peace and blessings be upon him) said: They are all equal.
However if one previously had borrowed money on interest and now he has to pay it back with interest then it would be permissible to use the interest money received from the bank to pay off interest on borrowed money.
Reason being would be since it is sinful to use one’s halal money to pay off interest and doing so one would be using it for haram. Now if one pays the interest with interest money then he would be saving his halal money from using it on haram. (Jadeed Fiqhi Masaail, vol:1 p:407)
Allah knows best
Syed Hussain ibn Imamuddin
27 January 2020