Uloan Extra Charges – If it is Interest or Service Charges

Ufone has a service for its prepay customers named ULoan. Under this service, Ufone started giving Rs. 15 advance balance so its customers can enjoy uninterrupted communication, in case they run out of balance. Customers can later on pay-back this loan on card recharge.

Since last couple of weeks, Ufone’s customers started complaining about the additional transaction charges which were being applied on the ULoan service. Customers have started sending messages saying that the extra charges which Ufone is taking is actually Interest (Suud), which is Prohibited (Haram) in Islam, alarming people to stop using Uloan as it is propagating Haram thing among the public.

If you check out ULoan’s details, it is clearly mentioned that transaction charges of Rs. 0.50 will be applied. It’s a general notion that we don’t give much emphasis to the terms and conditions of any service. So, we can’t say how many people read the details before using this service.

To clear this confusion we contacted Ufone and asked for their viewpoint, which is given below:

It is absolutely clear that any charges deducted on Uloan cannot be classified as interest. Interest in any circumstances means that it has a compound effect and it multiples with time. Also those who fail to pay are penalized with extra charges in all the interest based products.

In the case of ULoan the customer has to pay onetime fixed charges. These charges remain the same whether the customer reloads the account after a month or after four months. There are also no penalty charges for not reloading in a fixed time period. These charges on ULoan are simply a transaction fee. All other cellular operators also charge for different services where amounts are transferred either from the company or even between the customers themselves.

It is unfortunate that a product that has utility for millions of customers and is an industry trend setter has been targeted with baseless propaganda.

On the other hand, an Aalim of Jamia Aloom-e-Islamia, Banori Town, Karachi said that the extra charges which Ufone is taking is clearly Interest (Sood) which is Prohibited (Haram) in our religion. Check out the below screenshot (Taken from official website of Jamia Aloom e Islamia):


It merits mentioning here that Mobilink also has a similar service named Jazz Advance under which Rs. 5 advance balance is given to the customers. But Jazz only charges back Rs. 5, no transaction charges are applied to utilize this service.You can check out Jazz Advance details at here.

I won’t conclude anything here. It’s upto you guys to decide what’s the reality behind all this. Is Ufone actually taking Interest or it’s just an attempt to damage Ufone’s Brand image.

Share your opinion in the comments.

  • Assalaamualaikum;

    The service charges are clearly interest renamed to “Service Charges”.

    For that very reason that Ufone is charging interest on loan service I ported out of Ufone.

    Why the heck they are charging 60 paisas if they are already 5% service charges on loading balance.

  • SALAM…
    I am a fan of Ufone and using it but here no other opinion, this is clearly an INTEREST. As they hand us 15 rupees and when we make them return they charge 60 paisas, which becomes ‘SOUD’, also Ufone named it ‘ULoan’. Now if someone (either person, company or bank) gives you loan and you have to return back more than you get, then the extra paid amount is nothing but an INTEREST.

  • I totaly disagree with this mufti. bcz company is facilitating there customers. and then he take there chagres.(After helping him).Like when u order some thing that should be delivered to your home he should charge. so it is also called suud. in short if some one is facilitate u he should charge money or any thing. if any one thing that this is not good then he will not use this. but i request that not make this issue bigger. bcz we already our islam very critical and difficult for us..

      • sir u r right. i doesnt mean that this is difficult religion. the think that i say is that we people make it difficult by thinking such things… i agree that islam is very simple religion.

    • dear you are mixing the terms of “trading” and “loan”, when we order some thing at our home that is trade and service charging is the right/profit of that company

    • If I order something from any shop then they told me that we will take 50 rupees or 100 rupees as charges, whether u buy a product of 1000 rupees or several products of 5000 rupees, the delivery charges will be same… but here company is charging in terms of percentage, the higher u take loan the amount of % increased.

  • No doubt It is INTEREST
    Ufone never told to their Customer’s about this Service Charges in their advertise.


  • What about U2U extra charges? They are ripping us off in every way. Why do people have to pay tax on U2U when the tax on original amount has already been paid? You guys should write about that too.

    And btw, this is INTEREST. Ufone is lending money which they deduct on next recharge. And that’s only what they should get. Nothing more.

    [Comment edited]

    • U2U service is another case. Its between two customers of Ufone, and Ufone is facilitating the trade or money exchange between them. Thats doesn’t become INTEREST. On the other hand Ufone gives loan to us (remember either its name is Advance, Auto Advance etc, thats doesn’t matter, we have to check the theme behind), to help us, them according to Islamic teachings they aren’t allowed to take Interest on return, it they charge any thing thats clearly (سود)

  • I think it’s not suud. If they are giving u some facility so they can apply charges. I think one day we will say that the charges of calls and sms are also interest.

    • Agreed with you. Just want to add that they should inform their customers that we will charge “X” amount as service charges. What do you say ? :)

      • No according to Islamic teachings Ufone is not allowed to put service charges. And remember any service thats gives you loan and on return charge you becomes loan. Don’t confuse by saying it that there are SERVICE CHARGES only.

  • @Fahad Saleem:

    Fahad if you study sood in detail, it is exactly what you have just described.

    One borrows money only in time of need. And any profit on that loan is qualified as sood. Be it fixed or floating is another matter but it is, indeed, sood. So when you need some mobile credit, you use ULoan, which they are stating is LOAN, and you pay that loan back on next recharge, including any taxes. That very much qualifies, the extra 60 pesas as sood.

  • Well, i dont think its sood. Lets put it this way, Ufone is providing us with a special service whose charges is Rs 0.60 through which you get Rs 15 Balance when you are out of it.

    Dont we pay for every service for example Utunes, U2U etc

    Molvis are farigh log, they dont have anything to talk about thats why they make a controversy out of everything. Those who think its sood. Should not avail it..simple..

  • Well, i think this is interest, and following is the reason:

    Anything paid in advance, and then returned higher than what you had borrowed: that’s interest.

    Uloan is not rare case, credit cards, bank loans – everything has interest but we use them.

    I will second Sheikh Muhammad, if you don’t feel like paying interest, never use this service.

  • i totally disagree with most of the people who are saying that its suud and haram. i am not understanding this that the company is providing a simple services have many think involved like staff, communication equipment, their is a separate software developed for this service, Electricity and many other things… these all have some cost at the company’s end…

    Same is the case we take loan from the bank, we pay services charges when we eat in a good restaurants, we pay service charges in most of the services we are using in our daily life.

    a simple example for people to understand is that when u share balance with other the service charges is deducted now molv’s say its haram as well as we send Rs.10 and other get less then that …

    • Mam problem is not with service charges, everyone deducts them – but that’s not on loan. For instance, if you recharge Rs. 100 card, 30 Rs go as tax or service charge. Which is understand able.

      But the money taken as loan is something else. Please understand it

      • wasim u are just confusing the word LOAN if its name is not load then … its become HALA ? same services is offered by telenor auto advance and zong rescue etc … they all are then haram in ur opinion…

  • yaar kia ho gia hai ap logo ko …. how could this be SOOD ?

    let me ask you this.

    You buy some goods from your local market for lets say 110Rs. but you can buy the same thing from the Mandi which is 10KM away from your home for Rs 100. So what you say, the local shop keeper is earning SOOD? These are the charges against those services which help you get those goods near to your home.

    why you pay few paisa for doing a SMS or making a call to your brother/frined who is living just next door …. you could have just went up to him/her and have said the same things …right then why these mobile companies charge you …. is that SOOD too?

    we just want to pay less when other provide service to us but when we our self provide some service to others then we always want more than what we deserve

    Anyway, by defination, one can earn or ask for as much as he/she wants for his/her services as long as the terms and condition are clear to the other party and this is not SOOD. If both parties agree on some terms and conditions then its not SOOD …… Its our fault that we do not read the terms properly …. ok most of Pakistani can not read but all of you who have put their comments here are surly can read :-)

  • Please do not forget that the aspect of management cost also comes into play. Ufone (it will be sheer injustice to single out this mobile operator as all five mobile companies deduct service charges) must have developed some software for the purpose which is obviously not possible without huge IT set up Please do not forget that the aspect of management cost also comes into play like staff salaries, utility charges etc Even Islamic modarba companies operating under Islamic laws & regulation deduct service charges. First of all this is not binding on you to avail this service; naturally you will avail this service in distress when you desperately want to continue your talk and there is no facility of any recharge nearby. Ufone or any other mobile operator provides you this service with little service charges so what’s wrong in it. If you do not feel comfortable do not use the service; its as simple as that; one can even eat a pig in distress to save life

    I go to morning jog in a garden and when Iam done I sip a juice or two while calmly sitting on some bench reflecting upon happy memories, the waiter always charge Rs.20 per juice instead of 15 because Rs 5 are service charges. Is it interest then?

    The proper definition of Interest perhaps also says that it tends to increase with every passing day and there has always been a cut out date to pay back the interest; in this case there is no time bar when you reload your account or whether you reload it or not. an any Aalim tell me how come this is interest when there is no fix date to pay back and it remains the same regardless of time?

    The tehkedar of Islam should realize that they already have pushed us almost into stone ages due to their narrow mind vision. So please devote your energies to some good cause

    • phir tu ufone ko lakhon rupees kay loan dainay chiyey aur interest laina chiyey in name of service charges.

      1 rupayee kay haram aur lakh rupayee kay haram main koi farq nahi, dono haram hotay hain.

      • bhai mery agr aap ko haram lagta U loan to na lia kearin. In molvion k pechy rahy to gay kam say. In ki aapis main to banti nai hy or dosron ko sabq dety hain

        • Mai uLoan phle b use nhe krta mgr is ko use na krna se masla hal nhe hoga dekhna ye h k ye Sood h k nhe. Haram cheez Haram hoti h or is k khilaaf awaz buland kr b aik jihaad h

  • haan ufone to nahi per banks hain na loan ke liay …. lakhoan nahi karooroan ke loan detay hain ….. per woah ap ko majhboor nahi kertay loan ke liay … agher ap samujhtay hain ke un ki conditions fair hain to tub hi ap loan letay hain werna next bank ke pass jatay hain …right?

  • Dear Zeeshan You totally Got it wrong, dude.

    Better consult a scholar before saying this is not interest.


  • All of you who say that they are providing you a service. Please listen this. When someone gives us LOAN, can he ask for extra charges in the name of service charges. He is also providing you service, isn’t it? So you can say that he is providing us a service so he can charge extra?

    Same here is the case. If Ufone say that they are charging for their service, then they are totally wrong. I give someone loan and ask him to provide some extra money for my service to you.

    Just for Rs 15 you all have gone blind as that you are ignoring the teachings of Islam and openly saying that it is their service charges.

    The Holy Prophet said to avoid anything which brings doubt. Can you not avoid taking this loan. Is it really so hard for you to go and recharge your account. Every other shop has cards available now. Please my friends don’t indulge in activities that may increase your chances of going to hell. PLEASE

  • dears brothers…. wht the mufti(molvi) Saab said is right… becoz they know the better ISLAM than us….. so no comments on that….

    • Our so called muftis and molvies are training young kids to go and kill their muslim innocent brothers and sister …. so we should be happy about that too … they know islam better than us …right? ….ah but now some one will say USA us behind this….. the one who actually execute is trained by our so call muftis and molvies ….

      • Please jo topic h usi pe baat krain.
        Kuch bolnay phlay soch zaroor lena chahiye (k kahin ma kuch galat to nhe khne ja rha)



    Remember there are many __________ among us, who show themselves Muslims and try to make the teaching of Islam confused, the people who declare it as ‘Service Charges’ or ‘Non-interest’ may the MUNAFIQ or OTHER NON-MUSLIMS be.

    [Comment Edited]

  • Its the best post i found on this site so far…

    I really appriciate their efforts to make people aware n updated.

    Khuda kare zor e biyan or ziada!

  • I would consider it sood as well as un-necessary cahrges. Because, on 15 Rs, one is already paying taxes, on top of it, if ufone starts to charge .60, then it’s not justified.
    Moreover, why Ufone didn’t realize this since they launched uloan. For many months they didn’t charge service charges, why all of a sudden they remember charging service charges on uloan?

    According to Islam, if extra is taken on loan, then it’s clearly sood.
    Islam didn’t give any justifications or conditions. The only extra return on loan isn’t consider sood, if person who took loan on his wish returns more than he borrowed. If the party who is providing loan and don’t give a choice to the person who is taking loan, then it’s clearly sood!

  • Any extra amount that u pay on loan (whether u call it service charge or some other name) is the interest (sood). Ufone officials must first learn about riba. I think they dont know the preliminary definition of riba. Well I left taking uloan because I dont have courage to fight against ALLAH…

  • Assalam O Alaicum,

    Dear All,

    When he(person) asked from Ufone like do you charge on this … they yes, so it is not SUUD, & simple no one told you about they will charge on this service in advertisement, even all companies have made 30 sec to 1 minute, nobody cry on it … how Idiots we have ..

  • Let me say something about Jamia Uloom-e-Islamia Banori Town which has been a great source of unrest and anarchy in the country. Every Tom Dick and Hary knows that this very Jamia raised and groomed fanatics in the shape of Taliban which later turned their guns to their mentors. Another very serious observation is that it did not make any effort against this very to get the better of two worlds for its students and only created bigots whose vision of world was severely distorted which led to ultimate anarchy in the country.

    Even some intelligence reports suggested that its chief cleric Maulana Yousaf frequently met the fire brand elusive leaders of Taliban like Mullah Omer of Afghanistan and now killed Baitullah Mehsud. His regrets on the demise of Baitulah Mehsud are no secrets.

    This University heavily funded Taliban and other splinter groups and the question arises from where this University gets fund; it collects funds through sheer coercion and then spends these funds for the purchase of lethal arms. Had this Madressah focused its energies in making dynamic Muslims, things would have been better for the country

  • Till how long will we remain hostage in the hands of these fanatics.Did Maulana Yousaf ever advocated the importance of education,rights of women and other fellow Muslims? etc

    Why is he making a mountain out of molehill?

  • Here is something to read: http://en.wikipedia.org/wiki/Islamic_banking
    “In an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments.”

    There are many other forms too mentioned on the above site.

    Now think that telenor has bought Airtime worth of Rs15 for you and sell it to you for a profit of 60 paisa. They do not even imply any time limit. So how come this become SOOD?

    I would request those who declare it sood , please come up with proper ref. or explain me who islamic banking is not SOOD? If selling something for a profit is SOOD then ….:-(

  • “No if I would have bought 15Rs worth of Airtime myself then I would only have paid 15Rs. But now as company is buying on behalf of me so its ok if they get some profit on it.”

    Dude they are already earning profit on 15Rs when u use their service. And how can they buy their own goods/ service? In bank case the buyer, seller and bank are 3 different person. Buyer don’t say that he is going to buy his own goods and then sell it to the seller by adding some profit. I suggest u to read Islamic banking once again.

    “what you are saying is that I go to shop keeper and tell him look I just saw on TV that Suger is 40Rs per KG in mills, so go and buy some suger from mill and once you have that suger then I will come and buy it from you at 40Rs/Kg rate. The sugar I got finally is worth Rs40 so why I should pay any extra to my local shop keeper ….right ? Do you think this is logical/fair/islamic?”

    Once again in sugar case the shopkeeper buys sugar from some other person. He can’t say that he would buy his own sugar (that he is selling) and then sell it to you..

    I hope you are now understand that in islamic transaction 3 persons are invloved. Buyer (the person who wants to buy goods), The seller (who wants to sell his goods) and the bank (who play a role of middle man, buys goods from the seller and then sell it to the buyer with his profit)

    All you is saying that Ufone buys his own product in Rs. 15 (service, that he is selling) and then sell it to the customer (buyer) with addition of 60 paisa. How can she buy his own goods that she is already selling?

  • landed here while using Google search. There are two types of people opposing this ‘service charge’.
    1) Those who just hate the idea of paying the 60 paisas.
    2) Those who really are careful when it comes to religion.
    There are two types of proponents here.
    1) Those who have a habit to blame everything on Mulla/Molvi etc. I just wonder that if they have to learn sciences, they go to a university and if they have something about religion, they prefer to take decisions themselves. I wonder, why do they bother having a religion at all?
    They should know that we have all type of molvis around. We have those as well who declared interest-based banking ‘halal’. But honest molvi people aren’t extinct. You just need to look for them. (I am not speaking for any jamia here).
    2) Those who find this ‘sood’ a very minute amount, and consider it ignorable. This interpretation eclipses their judgement and they find themselves standing among those who call it non-sood.
    That said, isnt it disgusting and ridiculous that a company, which can earn millions in a minute, is so mean as to charge Uloan service?
    Service charge is okay when you have money in pocket to pay for the service rendered. or even you delay the payment, you dont have to pay even a penny extra.
    Whats the problem with ULoan? You want to make a call and dont have the balance. So, you use ULoad end up paying them Rs 15.60. You essentially took a loan to make Rs.15 calls (you pay taxes and call charges), but when you pay that 60 paisa amount, what else is it if not interest?
    In this 15.60, there are taxes, Ufone’s service charges and THE REST IS INTEREST.
    Seems like soon there shall be a time when interest shall be relabeled as “service charge” and no one shall point that out. Nice progress of enlightened moderation.

  • Salamu Alikum,

    This is a REALLY interesting article specially when it comes on “REPAYING” Keh Ufone sirf .50 paisa chargae karta hai .. the interest doesn’t INCREASE. So far.. it is INTEREST kyun keh Loan wapsi karnay per zyada raqam wasool karna sood hai without any doubt weither you still charge 0.50 paisa even after 1 thousand years. Aur yeh 0.50 interest was not introduced before. Pehlay UFONE nahi layta tha yeh izafi charges.

    By Allah! I don’t take ULOAN from that day to return them an extra amount. Praises to Lord!

    Mr. Khan

  • http://darulifta-deoband.org/showuserview.do?function=answerView&all=ur&id=22075&limit=5&idxpg=0&qry=%3Cc%3ETAD%3C%2Fc%3E%3Cs%3EUAI%3C%2Fs%3E%3Cl%3Eur%3C%2Fl%3E

    معاملات>> سود و انشورنس
    Pakistan Question: 22075
    آپ سے مسئلہ یہ معلوم کرنا تھا کہ یوفون نامی ایک موبائل کمپنی نے اپنے صارفین کو کو ایک سہولت دی ہے کہ اگر کسی صارف کا بیلنس ختم ہوجاتا ہے تو موبائل کمپنی اسے 15 روپے تک کا ادھار وقتی طور پے لےنے کی اجازت دیتی ہے اور جب وہ شخص اپنے موبائل میں جیسے ہی بیلنس ڈالےگا تو کمپنی اپنے 15روپے فوری طور پے واپس لےلیگی۔ یہ ایک اچھی سہولت ہے اور ہم نے اسے کافی استعمال کیا۔آج کسی نے مجھے بتایا کہ کمپنی 15 روپے ادھار دے کر واپس 15 روپے لینے کے بجائے 15 روپے اور 60پیسے لیتی ہے۔ اس بات کی تصدیق کے لیے میں نے کمپنی فون کرکے معلوم کیا تو انہوں نے اس بات کی تصدیق کی اور کہا کہ یہ 60پیسے جو ہم اضافی لے رہے ہیں یہ ہمارے سروس چارجز ہیں۔ اب آپ برائے مہر بانی رہنمائی فرمائیں کہ کیا یہ معاملہ سود ہے؟ اگر ہے تو کیا ہم اس میں گناہ گار ہونگے؟
    May 10,2010 Answer: 22075
    فتوی(ل): 840=582-5-1431

    کمپنی کا یہ معاملہ سود میں داخل نہیں ہے۔
    واللہ تعالیٰ اعلم

    دارالافتاء، دارالعلوم دیوبند

  • Assalamo’Alikum!
    For those who consider it as “Service Charges” would definately continue using this service while others who took it as “Soud” may prevent using this service and secure themselves from Haram.

    It is however, as a matter of fact agreed and consiered by both parties i.e., Ufone and Customer as “Loan” then the additional charges over principal amount is not other than “Interest” or “Soud”.

    While if such “Loan” will be delivered in state of “Cash or Any Other Asset” to your doorstep then Ufone would be liable to claim additional charges in terms of transporation, fueling or service charges.

    Saud Khan

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