Asset-backed loans?

[jimmy2004]

ASA all,

I probably already know the answer but: are we allowed to borrow money against our assets like our stocks? Read that this is what the ultra-rich do in the US, so they get money that doesn’t show up as W-2 income while also not selling their stocks and incurring capital gains.

I feel like it differs conceptually from normal loans, since we have halal assets put up for collateral rather than just money which Islamically is not a true asset that can be used to make money by traditional loaning.

Would love to know more iA, JZK!

 

[nusue]

@jimmy2004 God allowed the gains of exchange (baii halal) and prohibited the practice of interest (riba), but voluntary lending (kardh al hassan) is permitted.
The problem for Muslims is that they want to enrich themselves by integrating into modern finance which includes too many pitfalls linked to the haram.
The most halal is to create direct investments based on the sharing of risks and halal gains individually or in companies.