Paying back a loan with interest money

Question

Paying back loan with interest money.

I am currently taking a student loan aiming to pay it back before graduation so that there's no interest on the loan. I have a bank account which accumulates interest and I cannot remove that so I take that money and give it away to needy etc, without intention of reward. Instead of giving the money to the needy, would I be able to use that money to pay back the student loan? This would assist me in making sure that I have paid the loan back before graduation.

JazakhAllah

Muhammad IV Patel · Accepted Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

In principle, one cannot derive benefit from interest money. [1]

Interest money must be disposed of to the poor and needy without the intention of reward. [2]

However, if a person is poor, and does not have sufficient funds to pay his debt and is eligible to accept Zakaat, then it will be permissible to pay his debt with interest money. [3]

Accordingly, you may use the interest money to pay your debt.

We make du῾ā’ Allah opens His doors of sustenance for you and provide you with all your requirements in a halal manner. Aameen.

And Allah Ta’āla Knows Best

Muhammad IV Patel

Student Darul Iftaa
Lusaka, Zambia

Checked and Approved by,
Mufti Ebrahim Desai.

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