Studying in University and Signed Up for a Loan with Riba
Fatwa No: 458107

Question

As-salamu alaykum, I am currently studying in university and I have signed up for a loan even though I know it’s haram but I didn’t know what else to do. Do you think I can pay for university without a loan? Maybe I can get many jobs to pay of my tuition. Almost every day I have this huge feeling of guilt for signing up for a loan. A lot of members in my family who are Muslim have signed up for university loans and one of them actually helped me sign up for one. If it was all up to me and I didn’t care what other people thought, I would either figure out a way to pay my tuition by myself and if that doesn’t work, drop out of university all together. So what I want to know is, what should I do, quit university? I am in my first year. Also one more thing, is it true that it’s ok to have a loan as long as I sincerely have the intention to pay it back before I die and I don’t leave it on the side? Jazakumullahu khairan

Answer

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

If it is an interest-based loan, it is forbidden and it is impermissible for you to take it except for a Sharee‘ah-approved necessity, and what you mentioned does not constitute one. You may fund your studies by working and earning a living through lawful sources, as stated in the question. There are many lawful alternatives available for those who sincerely seek them. You should bear in mind that whoever gives up something for the sake of Allah, The Exalted, He will compensate him with what is better.

Accordingly, it is incumbent to withdraw the interest-based loan request if possible. However, if it is not possible and you have already taken the loan, you should hasten to repay it to the best of your ability, if the early repayment of the loan before its due time means that you would be no longer liable to pay usurious interest charges, otherwise, you should not give them the benefits of the early payment and usurious interest charges.

You should also seek forgiveness from Allah, The Almighty, for taking an interest-based loan, regret it and resolve not to do it again.

As for holding the intention to repay the loan, it does not deem permissible what is forbidden. If a Muslim borrows money with the intention of repaying it, then dies before paying off his debt, none repaid it on his behalf from his estate, and none of the heirs or others voluntarily repaid it, then Allah, The Exalted, will repay it on his behalf in the Hereafter. This is evidenced by the Hadith that reads: “Whoever takes people’s money with the intention of repaying it, Allah will repay it on his behalf, and whoever takes it in order to spoil it, then Allah will spoil him.” [Al-Bukhari]

Al-Hafith Ibn Hajar  may  Allaah  have  mercy  upon  him said: “In this case, the most likely correct opinion is that his liability is cleared from this debt in the Hereafter, meaning that the debtor’s good deeds would not be given to the creditor. Rather, Allah, The Exalted, will repay it on behalf of that debtor.” [End of quote]

Allah knows best.

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