Borrower paying a certain amount of the loan when delaying repayment
If the case is actually as mentioned, that it is agreed upon if
the borrower (Part No. 13; Page No. 523) repays the loan before the set period he is not fined, and if his payment is delayed he is obliged to pay 1% extra, this is a Riba-based contract involving Riba Al-Fadl (usury of excess); the extra money to be paid, and Riba Al-Nasi'ah (usury of delay, conditional excess for delay of payment) which is the fine for delay. Similarly, if the company pays money to receive an extra percentage for such service, it is evidently Riba.
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.