Answered by Shaykh Ilyas Patel
I have taken out a student loans to the value of 5000. I currently have 8000 in my bank account including the loan amount.
The student loan only has to be paid back once I earn a certain salary. If I do not earn above the threshold I do not have to repay the loan.
There is no interest (in the normal sense) as such on the loan but it does accrue a rate of inflation on the principal amount.
Also the loan can be repaid at any given time regardless of financial position.
With regards to this, I have the following questions:
1. On what amount is Zakat liable?
2. Do I need to repay the loan even if I do not earn a salary above the
required threshold
3. Are these type of loans halal?
In the name of Allah Most Compassionate Merciful
I hope you are fine and in the best of health and iman.
A1.
You will deduct your 5000 loan and any other debt that you have. What you are left with, if it is above or equal to the minimum threshold for zakat then you will pay zakat on the remainder after deducting the 5000 and other debt that you have.
A.2
You will eventually be working and their will be interest accrued on that amount, even if not at present. So it is best to repay the loan as soon as possible by either taking an interest free loan from an Islamic bank or private trust or from relatives and friends. This is not a huge amount as such. In other words, try to repay the loan and make it your priority.
A.3
These types of loan are not halal, as they will eventually accrue interest whenever you come around to repay them. [And a financing condition of potential interest payments in the future is also considered riba and therefore not halal – Faraz]
And Allah alone knows best