Short answer
Yes. Paying interest is haram just as taking it is: the Prophet ﷺ cursed the one who pays riba along with the one who takes it and said they are the same. The Hanafi school allows borrowing on interest only in real necessity, when no interest-free way exists to meet a basic need.
Taking an interest-bearing loan is haram for the borrower as well as the lender. Hanafi jurists allow a person in genuine need to borrow on interest when every halal route has failed, and then only as much as the need requires; the sin of the interest then falls on the lender.
The four schools agree on this.
Explanation
Many people assume that only the bank sins, since the borrower is the one losing money. The hadith says otherwise. The curse names four people: the one who consumes riba, the one who pays it (mukil), the one who writes the contract and the witnesses, "and they are all the same." Signing an interest loan is taking part in riba.
The warnings are severe. The Quran describes those who consume interest rising on the Day of Judgement like someone driven mad by Satan (2:275). In a dream the Prophet ﷺ was shown a man in a river of blood, with stones thrown into his mouth each time he tried to climb out, and he was told this was the one who consumed riba.
Hanafi jurists record a narrow allowance: a person in need may borrow on interest. Need here means real need, such as food, shelter, urgent medical treatment or protecting yourself from serious harm, after you have tried family, friends, a qard hasan (interest-free loan) fund, a masjid fund, selling assets and cutting costs. A bigger house, a newer car, a wedding, a holiday or growing a business does not qualify. The Quran's rule on necessity is "neither desiring it nor transgressing" (2:173): take only what removes the harm.
If you already have an interest loan:
- Repent sincerely. See Salat al-Tawbah.
- Pay it off as fast as you reasonably can, so you pay less interest.
- Do not default. The money you borrowed is still a debt you owe.
- Do not take new interest loans, and look for halal ways to refinance.
The four schools agree that paying interest is haram. Whether your own situation counts as necessity is a question for a qualified mufti.
Ask a mufti about your own case. This answer explains the general ruling. When the details of your situation matter, as they do here, ask a qualified mufti and give them the full facts. Where to ask a scholar.
The evidence
Quran, Surah Al-Baqara 2:275
ٱلَّذِينَ يَأْكُلُونَ ٱلرِّبَوٰا۟ لَا يَقُومُونَ إِلَّا كَمَا يَقُومُ ٱلَّذِى يَتَخَبَّطُهُ ٱلشَّيْطَٰنُ مِنَ ٱلْمَسِّ ۚ ذَٰلِكَ بِأَنَّهُمْ قَالُوٓا۟ إِنَّمَا ٱلْبَيْعُ مِثْلُ ٱلرِّبَوٰا۟ ۗ وَأَحَلَّ ٱللَّهُ ٱلْبَيْعَ وَحَرَّمَ ٱلرِّبَوٰا۟ ۚ فَمَن جَآءَهُۥ مَوْعِظَةٌۭ مِّن رَّبِّهِۦ فَٱنتَهَىٰ فَلَهُۥ مَا سَلَفَ وَأَمْرُهُۥٓ إِلَى ٱللَّهِ ۖ وَمَنْ عَادَ فَأُو۟لَٰٓئِكَ أَصْحَٰبُ ٱلنَّارِ ۖ هُمْ فِيهَا خَٰلِدُونَ ﴿٢٧٥﴾
Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, "Trade is [just] like interest." But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein.
It describes the state of those who deal in interest on the Day of Resurrection.
Quran, Surah Al-Baqara 2:173
إِنَّمَا حَرَّمَ عَلَيْكُمُ ٱلْمَيْتَةَ وَٱلدَّمَ وَلَحْمَ ٱلْخِنزِيرِ وَمَآ أُهِلَّ بِهِۦ لِغَيْرِ ٱللَّهِ ۖ فَمَنِ ٱضْطُرَّ غَيْرَ بَاغٍۢ وَلَا عَادٍۢ فَلَآ إِثْمَ عَلَيْهِ ۚ إِنَّ ٱللَّهَ غَفُورٌۭ رَّحِيمٌ ﴿١٧٣﴾
He has only forbidden to you dead animals, blood, the flesh of swine, and that which has been dedicated to other than Allah. But whoever is forced [by necessity], neither desiring [it] nor transgressing [its limit], there is no sin upon him. Indeed, Allah is Forgiving and Merciful.
Necessity lifts a prohibition only within the limit of the need.
Sahih Muslim 1598
Sahih... آكل الربا وموكله وكاتبه وشاهديه وقال هم سواء ...
"He cursed the one who consumes riba, the one who pays it, the one who writes it and its two witnesses, and said: they are all the same."
The payer of interest is named with the taker.
Sahih al-Bukhari 2085
Sahih... الذي رأيته في النهر آكل الربا ...
"The one you saw in the river is the one who consumed riba."
It shows the punishment in the barzakh for dealing in riba.
Where the ruling is recorded
- al-Ashbah wa al-Nazair (Ibn Nujaym), The fifth principle: harm is removed. Records that a person in need may borrow on interest.
- Radd al-Muhtar (Ibn Abidin), Kitab al-Buyu', Bab al-Riba. The prohibition of riba for both parties.
This answer is pending review by the scholars on our team. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.