Student Loans

Assalamualaikum,

I need to know if it is permissible for me to take out interest based student loans to fund my education which I cannot afford otherwise out of pocket.

Jazakallah.

 بسم الله الرحمن الرحيم

الجواب حامدا ومصليا ومسلما

In light of  Qur’an and hadith, it is evident that giving interest is undoubtedly haram. If taking a student loan mandates that interest is given only in the case that it is paid off later than the due date, it is permissible to take the loan provided that you are absolutely confident that you will pay it off on time, to ensure that you will not pay any interest. If you are doubtful in regards to paying it off on time, you should abstain from taking it. Likewise, if paying interest is necessary regardless of when the loan is paid off, it must be avoided. Consider the following verses of the Qur’an and hadith:

“Allah had made business lawful and interest unlawful.”

 (Surah al Baqara: 275)

Jabir (may Allah be pleased with him) said that Allah’s Messenger ﷺ cursed the acceptor of interest, its payer, the one who records, and even the two witnesses. And the Messenger of Allah (may Allah bless him and give him peace) would say that they are all equal.

(Muslim)

We suggest you find an alternative to funding your education. Perhaps you could apply for financial aid with FAFSA, or attend a community college to lower your tuition fees. And, if need be, you can work part time to pay it off. Whatever the case may be, giving interest should not be taken lightly and should be avoided at all costs.

والله اعلم

Allah subhanahu wa ta’ala knows best.

Taha Abdulkareem

Approved by Mufti Husain Ahmad Madani