I am about to begin University, and I have saved some money, but it is not sufficient. The government of the country in which I live offers a loan to students, for which you do not have to pay interest if you repay it within six months after graduating, at which point the government will require you to pay interest, if you have not finished paying off the loan within six months. I intend to take only as much as I need, and to repay the loan within six months, before interest is added. Is it permissible for me to accept this loan?
Praise
be to Allah
It is not permissible to sign a contract for a loan that
includes this riba-based condition, because that involves committing to
pay riba. Moreover there is the possibility of actually falling into it,
if circumstances arise that lead to delay in repayment.
The scholars have explained this with regard to a similar
issue, which is taking loans by means of credit cards.
It says in a statement issued by the International Islamic
Fiqh Council, which is attached to the Organisation of the Islamic
Conference, in its twelfth session held in Riyadh in the Kingdom of Saudi
Arabia, 25 Jumaada al-Aakhirah – 1 Rajab 1421 AH (23-28 September 2000)
concerning the topic of credit cards:
It is not permissible to issue or use credit cards that are
not preloaded, if there is a stipulation of riba-based interest charges,
even if the one who requests the card is determined to pay off the debt
within the free grace period. End quote.
Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was
asked: The banks offer their customers a credit card (Visa), which enables
the customer to withdraw a certain amount of cash from the bank, even if
there is no money in his account at that time, on the basis that he will
repay the bank after a certain time period, and if he does not repay it
before the end of that period, then the bank will ask the customer to pay
back more than he withdrew. Please note that the customer will pay an annual
fee to the bank in return for using that credit card. I hope that you can
explain the ruling on using these cards.
He replied: this transaction is haraam, because the one who
signs up for it is committing himself to pay riba if he does not repay
within the stipulated time period, and this commitment is invalid, even if a
person believes or thinks it most likely that he will pay it off in full
before the end of the stipulated period. That is because his circumstances
may change, so that he will not be able to pay it off. This is something
that is in the future, and no person knows what will happen to him in the
future. Therefore a transaction of this nature is prohibited. And Allah
knows best
End quote from Majallat ad-Da‘wah, issue no 1754, p.
37.
But if it is not possible to study except by taking a loan
from the state, and you are determined to pay it off in a timely manner,
without being compelled to pay interest, then we hope that you will be
excused.
This website put the following question to Shaykh Muhammad
ibn Saalih al-‘Uthaymeen (may Allah have mercy on him):
The Visa credit card includes a condition stipulating riba if
there is a delay in paying it off, requiring me to pay a penalty. But in the
place where I live in America, it is not possible for me to rent a car or a
shop or avail myself of many public services except by using a Visa card,
and if I do not use it, I will be putting myself in an unbearable position.
Does my commitment to pay off within a certain time period, so that I will
not owe any interest, make it permissible for me to use this credit card,
so as to relieve the hardship I am faced with?
He replied as follows:
If the hardship faced is real and the possibility of delaying
repayments is remote, then I hope that there will be nothing wrong with it.
Question:
Does the invalid condition that stipulates riba render the
contract invalid or not?
Answer:
If the contract contains an invalid condition, it does not
render the contract invalid, for several reasons:
1.
Necessity
2.
Because the condition is not going to be applicable, as
the man thinks it most likely that he will pay it off on time.
As it is the case that the man thinks that he will pay it off
on time, and the condition is not applicable, and because of necessity –
which is the final and most important point – I hope that there will not be
anything wrong with this, because we have a real issue, which is necessity,
and we have something uncertain, which is delay in payment. And paying
attention to that which is real and certain is more appropriate. And Allah
knows best.
However, our advice is to look for another means of paying
the costs of study, far removed from riba and its dangers.
And Allah knows best.
