Interest on insurance accounts and student loans : student loan in Canada

Fatawa Question

Dear Sir, I am a student at the University of Toronto. I am taking OSAP (Ontario Student Association Program). It is an organization which provides financial assistance to students by giving them loan. I would have to start making monthly payments after I am finished with my studies at the university. However, after I am done, if I don't fully pay my money within 6 months... they would start charging me interest. I have recently come to know that interest (Riba) is Haram and one should not put himself in a situation that he has to pay it. Right now, regardless of how much I try, I would probably have to pay some interest. The only thing about continuing to take OSAP would be that I would have to pay more interest than what I would eventually be bound to pay (if I stop taking it) In terms of my family conditions, my parents cannot afford to pay me as much money as required by the university for all 4 years. In fact, we are getting a break even for the income and expenses. In other words, we barely get to have some savings. So my question to you is, under these circumstances, should I continue to take OSAP ? Does Allah give me the permission to do so in terms of interest ? I will try to make money and pay off as much loan as possible without having to pay interest. However, is it okay, if despite my best efforts I end up paying interest, based on the circumstances in which I am in ?

Fatwa

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Publication Date

2011-04-11

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Islam
• Education
• Students
• Financing
• Loans
• Canada

No. of Pages

2

Data Type

Fatawa

Language

English

Record ID

BIM-730607

• APA
• MLA
• AMA