Purifying finances from interest

Everyday Islamic Finance Personal and Family Finance
#1

Salaams

I am in the process of purifying finances from conventional interest-based products to those that are halal.

If have recieved interest in the past. If I find that I am also paying interest, for example in a loan, can I use the interest gained to pay off interest accrued, essentially cancelling them out. Or do I give the interest gained away to charity and pay off interest charged through worked income.

Thanks

1 Like
#2

Wa alaykum salaam,

It is of course a major sin to be involved in Riba and you are doing the necessary and right thing by migrating to shariah compliant assets. You can net off the interest by paying it back.

#3

Salaams, thanks for the reply, can you please clarify what is meant by net off the interest by paying it back

Thanks

#4

I have the same question and would be grateful if you could also clarify.

For example:

Haram assets accrued from Pension: £100
Student loan interest accrued total: £100

So can the unlawful money from the pension be used to wipe out the loan interest? (I know this is probably not an ideal situation but given the predicament of such circumstances).

Jazakumullah

#5

You can pay the interest received towards the interest due. Scholars generally add a caveat to this rule that it should be from the same source - the counterparty should be the same in both instances.