Fatwa: # 45375
Category: Jurisprudence and Rulings...
Country:
Date: 24th August 2020

Title

Student loan query

Question

Asalamu Alaikum

 

I took out a student loan during my studies at university, not knowing the severity of taking interest. I have since repented and wish to make amends.

 

1) Can i delberately earn a salary below the threshold so that i do not have to repay the loan?

2) If someone else pays the loan off on my behalf and i repay this person interest free, would that be a better alternative to pay it back?

3) If i do pay back the loan as i do not have any other option, will i still be sinful? 

 

Jzk

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Hereunder are the answers to your question.

1)     The prohibition of the student loan is based on taking out an interest-bearing loan. That is irrespective of one paying the loan or not paying the loan by earning lesser than the threshold to pay the loan.

2)     If one pays off your student loans on your behalf, he becomes your Wakeel (representative). Hence, the payment of the student loan will ultimately be borne by you. Therefore, this scheme to repay the student loan will not be an alternative to avoid Riba.

3)     If you do not have other options to avoid interest. Then, in that case, you should continue to seek forgiveness from Allah and have a firm intention to avoid any interest-bearing transaction in the future. As you are obliged to pay the debt, we advise you to pay it off as soon as possible. You may take a Qardh Al-Hasanah (interest-free loan) from friends and family to quickly pay off your debt.

And Allah Ta’āla Knows Best

Shakib Alam

Student - Darul Iftaa

Pennsylvania, USA

Checked and Approved by,

Mufti Ebrahim Desai.

 

 

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