Bringing Interest-Free Student Loans to Canada

Bismillah.

Anybody who is going to University will tell you how difficult it is to manage expenses (unless your parents are filthy rich). For Muslims, it’s even more difficult since we cannot accept loans or contracts that have interest in them. Here’s a potential solution:

Inspired by emails sent by Muslim brothers/sisters who wanted to avoid haram and get out of interest-based loans, we decided that it is about time someone started showing the Canadian community benefits of interest-free banking by using student loans as a starting point. Being involved in the RBC Challenge as part of our Masters program gave us a great channel to push this idea forward.

We are trying to figure out a business model that is completely interest-free and at the same time provides a win-win situation. There are still a number of kinks to figure out and that is why getting feedback from the community is so important. The survey results will help us immensely in putting together a value proposition for RBC.

If implemented, this product will help students acquire student-loans that have no interest associated with them. This will especially help students who are religiously-averse to dealing in interest transactions.

Please contribute your opinions by filling out this 10-Question survey and sharing it with as many people as possible (it should about 5 minutes). We hope to start compiling survey results by November 15th:

http://www.surveymonkey.com/s.aspx?sm=BhHVpCmtPNWnp5_2f4waWnwQ_3d_3d

Please fill in the survey, it takes at most five minutes, in sha Allah.

Remember that, “whosoever intercedes for a good cause, will have the reward thereof.” [Nisa:85]


15 thoughts on “Bringing Interest-Free Student Loans to Canada

  1. Pingback: Bringing Interest-Free Loans to Canada « .:Tayyibaat:.

  2. I emailed the survey administrator regarding one of the questions: “5. On an interest-free student loan, would you be willing to pay “up-front” service charges that are equivalent to interest charges over the loan period?”

    My concern is that this is still riba. Any comments?

  3. Abdullah

    WAllaho alam, but that sounds like riba to me too.

    That’s why all of should choose no for that option in the survey🙂

    My concern is that this product will come out “half-halal”…meaning, it looks interest free but it has interest somewhere in the contract or in some other way.

  4. Pingback: Interest-free student loans (proposal)

  5. I agree. I am scared they will come out with something outright haraam but call it “islamic or shariah banking”.. audhubillah.. muslims, please use your brains.. dont be so gullible

    (from islamqa)
    It is haraam for the Muslim to borrow gold, silver or money from someone on the basis that he will pay back more than he borrowed, whether the lender is a bank or anyone else, because that is riba, which is one of the worst of major sins. Any bank that deals in such transactions is a riba-based bank.

    Fataawa Islamiyyah, 2/412
    http://www.islamqa.com/en/ref/45910/debt%20and%20repayment

  6. Pingback: Open Thread + Interest-Free Student Loans | MuslimMatters.org

  7. Pingback: Student Loans…What’s a Muslim to do? | Muslim Investor

  8. Good initiative, I am a mom of tow and would like to continue my studies. I have to avoid interest based loans, but if this option is available I will go for it and ear my masters degree Inshallah.

  9. Aslaamolaikum-What is the latest update on the ‘Interest Free Student Loans’ Have they been made available for the Muslim students as yet Or is this still in its ‘incubation’ period?

    By An Avid Muslim Student in dire need for Interest Free loan
    Jazakamullha-ho-Khairun for all your efforts
    Taqaballaho

  10. I am working on truly interest free models:

    http://trulyinterestfree.com/blog/?p=10
    http://trulyinterestfree.com/blog/?p=17

    However, student loans are tricky…

    Truly interest free loans are not possible unless the source of money is willing to give up his/her “rent on money.”

    Please explore the JAK Bank model:

    http://www.anielski.com/Documents/The%20JAK%20Bank%20Report.pdf

    along with this series of interviews:

    Contact me if you are interested.

    lee[at]TrulyInterestFree[dot]com

  11. Asslam ulakum!

    This is rafat here, i am the student of islamic finance and its like my assingmnet to suggest a model for islamic education financing i read different views what i come to conclude is

    ” Islam gives strength or develop societies and gives strength to social system, i would suggest we do start making a pool for muslims like Donation Pool where different people or members of pool donate the money for education purpose or any other good purpose… what the liablity on as borrower he/she should return the sum of money that would be used for another person education, like if i borrow $10000 for my graduation, after my graduation and my job it might be take 6 years now graduation fees of same university become 12000 so i should return cost of education, that some one else also get education and this cycle may continue…. and for pool maker this would be Sadqa Jariya”

    Regards,
    Rafar
    rafatsiddiqui@hotmail.com

  12. Greetings,

    Do you need Financial Assistance?
    We can help you?
    Apply now for Loan at 2% .
    You can contact us for a loan inquiry via email please
    Reply to via Email : ( maryjohn@consultant.com )
    Your have come to the right place were you get your Financial Freedom,You will be Glad of knowing a Loan Lender like Mrs Mary
    Please reply to via Email : maryjohn@consultant.com

  13. Assalamo alaykum me india se hun mera ladka sufyan humber collage me padhai karta he .muzko education loan ki reqaimemt he.yahan india me education loan bahot menhga he.or bahot tassub bhi rakhte he agar mere ladke ko canada se education loan mol jaa e to alhamdulilah me repayment baranar vakt se kardunga inshaallah.

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