Theme: Description and types of Riba

The Prophet (ﷺ) said in his farewell pilgrimage:
“Lo, all claims to Riba of the pre-Islamic period have been abolished. You shall have your capital sums, deal not unjustly and you shall not be dealt with unjustly”.

Narrated by Sulaiman bin ‘Amr bin Al-Ahwas رضي الله عنهما on the authority of his father.
(Source: Sunan Abi Dawood, No. 3334)
There are very few hadiths related to Riba al-Duyun (Riba in a loan contract) as it is mostly covered in the Quran. Nonetheless, the most salient of them is the hadith of the farewell pilgrimage above on Riba al-Jahilyyah, which is one of the types of Riba in a loan contract.

In short, (1) Riba al-Jahilyyah is the interest amount for rescheduling a loan payment, whereas (2) Riba al-Qard is the interest amount stipulated by the creditor/borrower above the principal amount.

It is important to note that Riba of a loan contract is not restricted to only money, and it includes all other forms of goods. It is recorded in Imam Tabari book “Jaami’ al-Bayan ‘an Aayi al Qur’an” that the people of the pre-Islamic period made use of animal in their Riba al-Jahiliyyah dealings, and then Islam came and prohibited such transactions.