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Lending money to family

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  • Lending money to family

    How do you handle lending money to family. Large amount of money that you are not comfortable sharing.

    My brother is buying a house (that I don't like & think is a bad investment). He is using Islamic financing but he needs to give large down payment, which he doesn't have. HE has 60% of the money he needs and is asking me to pay the other 40%. I don't know if that was always part of his calculation because we are family. Since I am not married and will be living in the same house as him, maybe he expected me to pay part of the fee. But I don't feel comfortable with it.

    1) Our current house, which my parents brought 13 years ago is still under mortgage. I took over the payment when I started working 5 years ago. More than half my paycheck + yearly bonus + tax return goes into this house. My goal was to pay as much as I can in the house because I don't know what type of guy I will end up with and if I can help my parents once I am married. So I wanted to do all I can now. My brother didn't help with this.

    2) I am perfectly happy in our current house and do not agree in "moving up" to better area and taking on another mortgage. Even if it is Islamic, it is the same bill. Also the house he brought is not worth the money he agreed to pay for it. I don't want to waste my money on this.

    3) I told my parents, don't expect me to contribute to the new house as my priority always been our current house. That I paid more than enough in this house, I am not about to pay for another one.

    The money he is seeking, I have but I don't want to give them. I don't know when I will meet the right guy and a wedding could be around the corner. Wedding cost money & these are my save money for wedding n future. Also if I get married out of town, it means I will be out of job. This save money is suppose to be my safety net until I start working again. I don't want to spend it on stupid house, especially since I deprived myself of many luxury (like brand name clothes n nice car) because I wanted a safety net for future.

    This is all loan and he promise to pay back as soon as he can. However, I might need the money a month from now or few months from now. He won't have the money by then. If he doesn't have the money, he can't pay back. What am I going to do then? My parents are talking about taking me back home to get married since its been 5 years of search. Once I empty out my bank account to help my bro, I won't have the money to pay for a trip back home.

    My brother and I don't share the same vision. I roll my eyes at his dreams & he rolls his eyes at mine. But as a family he asked me for money which I have. I feel obligated to give. But at same time, I might need this money in near future (like with in 6 month). I don't want to screw myself over in future but who knows what future will hold.

    Would you give or no?

  • #2
    Re: Lending money to family


    So much materialism subhan'allah.

    Your current house does it have interest on it? 'Haram mortgage'?

    Islamically it is not an obligation for you to pay, and if it is interest it is haram for you to pay.

    Would I give or no?

    If i am fine with my current position, no i would not give.
    "O friend, the cloth from which your burial shroud will be cut may have already reached the market and you remain unaware." Imam al-Ghazali R.A.



    • #3
      Re: Lending money to family

      The current house is my parents, not mine. I am just paying their bill as a way to help them out.
      It was under haram mortage when islamic finance wasn't big. Now it has been converted but that doesn't mean there is no "added" fee to pay. It is still just as expensive.

      My goal was to pay the current house that way my parents have a place to stay even if they have no money in future. If they get in fight with brother & he doesn't support them in old ages and I am married to some dude in land far far away, then at least they will have a 100% paid off house. This was a personal thing I wanted to do.

      This new house bro wants is his goal/dream. He is not fine with where we current live. It is ghetto, poor area, school are terrible. He wants to move so that when he has kids they are attending safe & good school. But this is his dream, not something I care about.


      • #4
        Re: Lending money to family

        Personally wouldn't pay.

        Why doesn't he just get a rent...

        and I don't get this 'dream' stuff...sounds like a fairy tail.
        "O friend, the cloth from which your burial shroud will be cut may have already reached the market and you remain unaware." Imam al-Ghazali R.A.



        • #5
          Salaam Alaikum.

          I think with all investments, after having done your risk analysis, I Think that you MUST follow your gut instinct. I also think that you are being dragged into someone else's 'dream' even though as a family member you feel obliged doesn't mean you have to unless it's an emergency. If you feel that within the short term you will need your money then explain you do and don't be swayed. I always give my brother money and he never returns it so that has to be one of your risk assessment factors.

          It seems like you've worked so hard for your money and mashAllah in the process you had your parents at heart. I think what your brother wants in terms of getting a house etc is luxury or his own personal goal so it is totally up to you what you want to do, and there is nothing wrong with every 'little' helps. But and it's a big but, remember putting 100% of your money in one basket is never ever a smart thing.
          Believe none of what you hear, and only half of what you see.


          • #6
            Re: Lending money to family

            you need to put it in writing, and i remember at an islamic class but can't reference that Prophet Muhammed :saw: said that you should do it more so if it's a relative (close person) as the tendency is to not give it back as it's family.

            so can use that as a justification


            • #7
              Re: Lending money to family

              Originally posted by Kya View Post
              But this is his dream, not something I care about.
              and that's that. Your brother is asking for too much.


              • #8
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                • #9
                  Re: Lending money to family

                  Have a written document signed by two independent witnesses clarifying how much is being lent and for what period of time.

                  If you feel you can't give him the full amount he is asking for then think about lending a lower amount and asking him to find alternative sources for the money.

                  It is your money but Allah Ta'ala loves when a Muslim gives an interest free loan to another, and you will also be maintaining the ties of kinship.

                  Personally, I think offering a portion but not the whole amount is better than giving the whole amount. As you said, you may need the money for your own purposes.
                  Rajab is a month of cultivation, Shaban is month of irrigating the fields, and the month of Ramadhan is a month of reaping and harvesting.”