Praise be to Allah.
Firstly:
A loan agreement that includes riba is a haraam contract according to sharee’ah, and it is not permissible to enter into it, even if the borrower intends not to pay the interest. The Prophet (peace and blessings of Allaah be upon him) cursed the one who consumes riba and the one who pays it, the one who writes it down and the two who witness it, and he said: they are all the same. Narrated by Muslim (1598).
Signing an agreement to pay riba and entering into the contract implies that one is committing to paying the riba that Allaah and His Messenger have forbidden, so he is included in this stern warning.
Secondly:
Riba is haraam and is a major sin whether the transaction is between Muslims or between a Muslim and a kaafir, because of the general meaning of the evidence from the Qur’aan and Sunnah which forbids riba. There is no exception for transactions between a Muslim and a kaafir. See the answer to question no. 8141.
And Allaah knows best.
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