Answered by Molana Javed ibn Nazir Kachhalia
Assalamu alaykum respected Mufti Sahib, I pray and hope that you are in a state of good health and imaan.
While I was studying at university (in the UK) i regrettably took out a student loan due to my lack of deen at the time, now I have come to realise that this was totally impermissible and wish to make amends.
According to the terms of the loan, i do not need to repay the loan if i earn below £17,775 per annum. The loan will be written off if I do not earn above this threshold after 25 years. I can repay the loan (plus interest) and make taubah but I feel very uncomfortable with this. My other option, which i am fully prepared to undergo, is that i continue to earn below the threshold for the next 25 years.
I want to highlight the fact that LEGALLY I do not need to repay a single penny if I earn below the above threshold so I would like your guidance as to:
1. Whether it is permissible to deliberately earn less in order to avoid paying any interest?
2. Whether I should repay the loan despite earning below the threshold (through voluntary payments) but not the interest?
3. Whether I should simply repay everything and just make taubah thereafter?
We should understand that there are two types of loans: (i) Permissible (ii) Impermissible.
Permissible: Is that loan which is advisable and encouragable to give and take from the Qura’anic verses and the Ahadeeth. Shariah also encourage us that giving loan is an act of virtues and by repaying them we will get rewarded.
‘O You Who Believe! When you contract a debt for a fixed period, write it down…’ (Surah Al Baqarah, v282)
The Prophet stated: ‘A Muslim is the brother of another Muslim. He should not oppress his brother or hand him over to the enemy. The individual who fulfils the need of his Muslim brother, Allah will fulfilhis need. That individual who removes a difficulty from his Muslim brother, Allah will remove his difficulty on the Day of Judgement.’ (Sahih al-Bukhari: 2442)
The above are the virtues in regards to giving loan. At the same time the ones who repays a loan will get rewarded too.
In the last moments of the life of Sayyidina Umar, after being stabbed in the Masjid of the Prophet, he (Sayyidina Umar) called his son, Abdullah ibn Umar and said to him: ‘The first thing you must be attentive to is the repayment of my loans. They are to be settled by my family. If they are unable to settle them, seek assistance from Adi bin Ka’b. If he cannot assist, seek help from the Quraysh.’ (Sahih Bukhari, vol 1, p524)
From the above Hadeeth we conclude that how important is to pay a loan taken.
Impermissible: Is that loan which is not permitted and which has got an element of ‘Usury’ or ‘Interest’ (Riba).
Allah SWT has cursed those kinds of loans:
“Allah has permitted transactions and has forbidden riba(interest)” (Surah Al Baqarah v.275)
In the Hadeeth:
Narrated Abdullah ibn Mas’ud:The Messenger of Allah (ﷺ) cursed the one who accepted usury, the one who paid it, the witness to it, and the one who recorded it.(SunanAbiDawood: 3333)
From the above, we understand that it is ‘Haraam’ and it should be avoided.
Now, going to your query and question, the loan that you have taken regardless if its permissible or impressible in all the scenarios you are entitled to repay it. This should be done as soon as possible with whatever mean and resources and aid you can find and get.
At the same time we shouldn’t be despondent of the Mercy and Rahma of Allah , do not despair of the mercy of Allah. Indeed, Allah forgives all sins. Indeed, it is He who is the Forgiving, the Merciful.” (Surah Zumar Verse 53)
“The Messenger of Allah (ﷺ) said: ‘The one who repents from sin is like one who did not sin.’” (SunanIbn Majah:4391)
Anas narrates that the Prophet has stated ‘Every son of Adam commits sin, and the best of those who commit sin are those who repent.’ (SunanIbn Majah:4392)
Whilst repenting one should make firm intention that Insha’Allah we won’t go back to those acts, which displeases Allah .
If in the future you need any loan, would be advisable to speak to family members and friends if they can help you and aid you with an agreement.
If you require more assistance with the answer please don’t hesitate to check our link: http://daruliftabirmingham.co.uk/paying-back-student-loan/ – Fatwa ID Fatwa ID: 02120
May Allah protect us and help us all to earn our means by doing the Halaal way and protect us from Haraam way. Ameen
Hope this have answered your query.
Only Allah knows best.
Molana Javed ibn Nazir Kachhalia
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham