Islamic student loans, also referred to as education financing or student funding in accordance with Islamic principles, are financial tools designed to assist students in pursuing higher education while adhering to Shariah guidelines¹. These loans are structured in a way that provides financial support for educational expenses while avoiding the inclusion of Riba (interest) and Gharar (excessive uncertainty), which are prohibited in Islamic finance¹.

The main purpose of Islamic student loans is to empower students to access funds for their education, covering various expenses such as tuition fees, textbooks, living costs, and other educational necessities¹. These loans are carefully crafted to enable students to pursue knowledge without compromising their religious beliefs, as they are structured to be Shariah-compliant¹.

In the United Kingdom, the government has made a commitment to introduce a student finance product that offers an alternative to interest payments. This new student finance product will align with Islamic finance principles and will be known as alternative student finance². It will be certified as Shariah-compliant and will incorporate the Islamic finance principle of Takaful, which provides a form of group-based mutual support².

Where to Get Halal Loans

  1. Alternative student finance: Interest is currently applied to all student loans, which poses a challenge for certain individuals who are unable to utilize these loans for their higher education due to their religious beliefs or personal convictions. This predicament is particularly prevalent among certain Muslims who are prohibited by their faith from engaging in transactions involving interest. To address this issue, the government has made a commitment to introduce a student finance option that offers an alternative to interest payments. This new student finance product will adhere to the principles of Islamic finance and will be referred to as alternative student finance.
  2. National Zakat Foundation: The National Zakat Foundation (NZF) in the UK provides financial assistance to Muslims facing hardship through three main areas: Hardship Relief, Housing, and Work & Education. The Work & Education Fund specifically aims to support unemployed or low-income Muslims in the UK by helping them secure employment and increase their earnings. Assistance can be sought for various purposes such as training course fees, certification and license fees, qualification conversion fees, and postgraduate academic courses lasting up to one year. Individuals looking to benefit from the National Zakat Foundation’s support must possess their own email address, mobile phone number, and a device capable of accessing the internet.

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How to Qualify for Halal Loans


In order to be eligible for Halal loans, which are in accordance with Islamic principles, there are specific steps that need to be followed. Firstly, you must provide the lender with essential information regarding your financial situation. This information will be crucial in determining the amount of funding that you may qualify for. It is important to be transparent and thorough in this step to ensure a smooth application process.


Similar to the process of applying for a traditional mortgage, you will be required to verify your income and demonstrate your ability to borrow. Additionally, you will need to provide proof of the intended deposit. These steps are essential in ensuring that you meet the necessary criteria for Islamic home financing. By adhering to these requirements, you can increase your chances of qualifying for a Halal loan that aligns with your beliefs and values.


It is important to understand the fundamental differences between conventional mortgages and Islamic home financing. Unlike traditional loans that involve interest, Islamic finance operates on a different basis that is compliant with Sharia principles. In Islamic finance, loans are structured as charitable arrangements, where the borrower only repays the amount borrowed, and the lender does not profit from the borrower’s financial needs. This unique approach fosters a relationship based on mutual investment, where both parties share in the profits and losses.

Categories: How To

David Brown

He is a writer covering financial news and trends. He has over 7 years of experience as a finance writer. He and his team are dedicated in providing a comprehensive resource for students and parents to make choices based on accurate and latest information in the student loan space.

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