Avoiding interest when paying off a loan

Answered according to Hanafi Fiqh by Muftionline.co.za

Q: I would like to make hajj in the near future so I need to pay off 2 loans. I have student loans from over a decade ago that I would like to pay off in full, however, I don’t want to pay the interest that has accumulated on these loans. If I can settle to pay just the amount of the original loan, would that be permissible? Also, if I would like to pay off a loan and the company agrees to let me pay just a percentage to have the entire loan forgiven, is that permissible?



1. Yes. The extra amount over and above the loan is riba (interest). Try your best to save yourself from the curse of riba.

2. Yes, if they assist you and waive off portion of the loan you are owning them, it will be permissible.

And Allah Ta’ala (الله تعالى) knows best.


Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)