Do I Need to Repay a Canceled Loan?
Answered by Shaykh Irshaad Sedick
Question
I took out a student loan intending to pay it off before the charge of interest. The government might cancel it. Is it more honorable and beloved to Allah that I pay it off anyway and as soon as I can? What are the considerations?
Answer
In the Name of Allah, the Most Merciful and Compassionate. May Allah guide us to that which pleases Him and forgive us for our shortcomings, Amin.
If the government cancels your debt, this is a blessing from Allah, and paying it back would not be necessary. If you so wish, you could give the amount to charity, especially towards the tuition fees of another student in need, and Allah knows best.
The Creditor’s Right to Cancel the Debt
The Quran encourages debt cancellation if, for example, a debtor is unable to repay the debt due to his particular circumstances. Allah says: “If it is difficult for someone to repay a debt, postpone it until a time of ease. And if you waive it as an act of charity, it will be better for you if only you knew.” [Quran, 2:280]
Since it is within the right of the creditor to cancel the debt, nothing is owed after that, and Allah knows best.
An Authority Can Waive the Debt
The Prophet (Allah bless him and give him peace) said: “I am closer to the believers than themselves. Whoever dies owing a debt, I will repay it, and whoever leaves behind wealth, it is for his heirs.” [Agreed Upon]
Was this applied only to him, or is it a duty of those in authority after him? The correct view is that it continues to be the case, but paying off debts should only come from the public wealth allocated for that purpose. [Fath al-Bari]
I pray this is of benefit.
[Shaykh] Irshaad Sedick
Checked and Approved by Shaykh Faraz Rabbani
Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar, Shaykh Taha Karaan.
Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Mawlana Yusuf Karaan, and Mawlana Abdul Hafeez Makki, among others.
He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has served as the Director of the Discover Islam Centre and Al Jeem Foundation. For the last five years till present, he has served as the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.
Shaykh Irshaad has thirteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic online learning and media platform called ‘Isnad Academy’ and pursuing his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy living and fitness.
