A student loan: whether halal or haram

When we hear the name of a loan, we always think about the interest on it. Many banks take an interest in the loan a person takes. People take loans for many different reasons, like autos, businesses, houses, etc.

In the same way, a student also seeks a student loan for his higher studies or to study his or her desired course in his or her dream college or university. But taking student loans leads everyone to think that student loans are haram or halal. In this article, we shall discuss in detail whether taking a student loan is halal or haram.

Are student finance loans haram or halal?

If anyone finances himself or herself for the purpose of the study. They must seek to take student finance loans from a bank. But before that, they always think student loans is haram or halal. The answer is that it depends upon your loan. If you are taking a student loan based on interest, that means that if a bank gives you a student loan on interest, then the student loan will be haram. Interest is forbidden in Islam, so if the bank gives you a student loan with interest, it is definitely forbidden.

A student finance loan can be halal:

A student finance loan can be halal. If you think the same question, then the answer will be "yes." The student loan can be halal if the following conditions are met:

“The student loan must not be interest-based. If you are taking a student loan and the bank does not charge any interest, then the student loan will be hilal, otherwise haram.”

Which banks’ student loans can be hilal?

If you are also looking for a student loan that will be halal, then you must seek an Islamic bank. Islamic banks can give you interest-free student financial loans, and that interest-free student loan leads you to pursue your dream goals.

In how many years can a student loan be repaid?

A bank gives a period of a maximum of 10 years for the repayment of a student loan from the date of the issuance of the student loan. Some banks also keep the following conditions on the remittance of student loans:

1- A student loan can be paid back in monthly installments after six months of having a job.

2- After one year, the student is eligible for graduation.

These are usually the conditions of the banks when you take a halal student loan to finance your studies.

Can unpaid student loans lead to a lien on my house?

If you have taken a student loan and are unable to pay, then a question must arise in your mind that due to an unpaid student loan a lien will be put on your home. So, we will talk about what impact it may have if you are not able to repay your student loan. We cannot say whether it will put a lien on your home or not if you fail to pay a student load. 

 5 major impacts can happen in your life due to unpaid student loans. Here are the following impacts of not paying a student loan.

1- It will close the doors on the loan in the future.

2- It will badly impact your credit score.

3- A bank may take you to court.

4- Your salary can be withheld by your company on the order of an honorable court if you fail to repay your student loan.

A portion of your earnings can be set aside for student loan repayment.

So, we discussed how student loans can be halal or haram. Moreover, we also discuss when a student can be hilal and when it can be haram. In the same way, we also told you how you can acquire interest-free hilal student loans for your studies. Lastly, we discussed the negative consequences of failing to pay your student loan.