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Halal or Haram Loans? Muslim Students Navigate Shariah Education Financing

For many students in the UK, getting a degree without taking a loan is a mission impossible.

Yet for Muslims, the struggle is more difficult with many of them choosing not to take loans which they perceive as haram or unlawful in Islam, Metro reported.

“I didn’t take out a loan for my masters because it’s haram so I planned to save up my salary to pay it off,” explains Muslim writer Rabbil.

“It didn’t go well because of rent and bills. I was just struggling already. My family had to step in which I was embarrassed by.”

Like Rabbil, many Muslims hoping to get an education face a dilemma – to take out or not to take out a student loan.

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Masuda, another Muslim student, had to weigh her options when it came to halal financing. She’d planned to raise the money needed to cover her tuition fees.

“I tried but ultimately failed,” she said.

“I took a gap year [to raise money] but I got so comfortable in working I didn’t return.

“However, I do have hopes and plans to go one day. I now work at a school and I do speech and language however to progress further I need that degree so the plan is to go back.”

Halal or Haram Loans? Muslim Students Navigate Shariah Education Financing - About Islam

Some Muslims end up taking out a loan as paying £27k upfront isn’t feasible (Picture: Ella Byworth for

Halal Loans

In 2016, the UK government approved new charitable Shari`ah-compliant loans for Muslim students to increase diversity on campuses.

The new “Takaful” model was said to allow students to make payments to a communal pot that would then benefit future students wanting to go to university.

Yet, according to, the UK government is yet to offer a system where such a halal student loan can be taken.

A halal student loan system could allow Muslim students to take out a loan but make charitable contributions rather than paying interest back.

Britain is home to a sizable Muslim minority of nearly 2.7 million.

Islam forbids Muslims from receiving or paying interest on loans.

Yet, according to Sheikh Ahmad Kutty, a senior lecturer and Islamic scholar at the Islamic Institute of Toronto, Muslim students are allowed to take the student loan if they have no other alternative. This is provided they are sincere in their intention to pay it back without incurring interest according to the best of your ability.

Dr. Shabir Ally also says Muslim students are allowed to take loans. He noted that while taking interest is haram in Islam, giving interest when Muslims are pressed to is a different thing.