Sahih Muslim Book 10, Hadith Number 3875.

Chapter : He who took something as loan and made its payment back, over and above that (19 approved) and best among you is one who is best in making payment.

Abu Nadra reported: I asked Ibn Umar and Ibn Abbas (Allah be pleased with them) about the conversion of gold with gold but they did not find any harm in that. I was sitting in the company of Abd Sa’id al-Khudri (Allah be pleased with him) and asked him about this exchange, and he said: Whatever is addition is an’ interest. I refused to accept it on account of their statement (statement of Ibn ‘Abbas and Ibn ‘Umar). He said: I am not narrating to you except what I heard from Allah’s Messenger (may peace be upon him). There came to him the owner of a date-palm with one sa’ of fine dates, and the dates of Allah’s Apostle (may peace be upon him) were of that colour. Allah’s Apostle (may peace be upon him) said to him: Where did you get these dates? I went with two sa’s of (inferior dates) and bought one sa’ of (these fine dates), for that is the prevailing price (of inferior dates) in the market and that is the price (of the fine quality of dates in the market), whereupon Allah’s Messenger (may peace be upon him) said: Woe be upon you! You have dealt in interest, when you decide to do it (i.e. exchange superior quality of dates for inferior quality) ; so you should sell your dates for another commodity (or currency) and then with the help of that commodity buy the dates you like. Abu Sa’ad said: When dates are exchanged for dates (with different qualities) there is the possibility (of the element of) interest (creeping into that) or when gold is exchanged for gold having different qualities. I subsequently came to Ibn ‘Umar and he forbade me (to do it), but I did not come to Ibn ‘Abbas; (Allah be pleased with them). He (the narrator) said: Abu as-Sahba’ narrated to me: He asked Ibn Abbas (Allah be pleased with them) in Mecca, and he too disapproved of it.