Prophetic Guidance on Debt Incurrence (Al-Istiqrāḍ) in Al-Ṣaḥīḥayn

Debt is sometimes viewed unfavourably in religious contexts, primarily due to the cautions, admonitions, and potential repercussions that accompany it. However, historical records reveal that the Prophet Muhammad (PBUH) and his Companions engaged in debt transactions under certain circumstances. This study aims to explore Prophetic guidance on managing debt incurrence (al-Istiqrāḍ), drawing from authentic Hadith sources, primarily Ṣaḥīḥ al-Bukhārī and Ṣaḥīḥ Muslim. Through a content analysis of these hadith collections, this research identifies and examines thematic analysis related to debt incurrence and proposes four guiding principles observed in Prophetic debt practices: the permissibility of credit transactions, the allowance of borrowing from non-Muslims, the provision of collateral as a guarantee for repayment, and a general discouragement of debt incurrence. These principles, grounded in Prophetic tradition, offer a nuanced perspective on debt, suggesting both ethical guidelines and practical considerations for financial transactions within an Islamic framework.