Indexation and the prohibition of Riba

Fatawa Question

As Salamu Alaikum and May Allah reward you greatly for this blessed service. This question consists of two parts. Nearly 3 years ago I took out a student loan. The only interest on this loan is that corresponding to the rate of inflation (i.e. the natural increase / decrease in the value of currency). (I) Was this loan Halal / Haram ? (ii) Should I repay this loan as soon as possible ? Why I ask this 2nd question is because the student loan Company is lenient in how it wants repayments to be made. They take a small amount from your wages (if they are over £ 10,000 pa) every so often. One can of course repay all the amount of loan at any time. However, if you die or reach the age of 65 before your repayments have been completed then the loan if "forgiven" !

Fatwa

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Publication Date

2002-06-10

Main Subjects

Economics & Business Administration
Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Islamic economics
• Contracts
• Inflation(Finance)
• Debt repayment
• Loans
• Analogy(Islamic jurisprudence)
• Usury

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-724106

• APA
• MLA
• AMA