Student Loans in the UK

Answered according to Hanafi Fiqh by

Answered by Shaykh Ilyas Patel

Jazakallah for yout response.
May Allah reward you greatlt, Ameen.

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 Gracious, Most Merciful

In the name of Allah Most Compassionate Merciful

I hope you are fine and in the best of health and iman.
The zakat is liable on the entire amount of �8,000. 
As you have taken the amount, though it was not permissible whichever way; either if you had payed as soon as possible or later after getting work. It is best that you pay it as 
soon as possible, as eventually you will be working and their will be interest accrued on that amount, even if not at present. Therefore, repay
the loan as soon as possible by either taking an interest free loan from an Islamic bank, private trust or from relatives and friends. This is not a huge amount as such.
In otherwords, try to repay the loan and make it your priority.
These types of loan are not halal, as they will eventually accrue interest whenever you 
come around to repay them.
 And Allah alone knows best


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