Student loans, when is interest counted


I have student loans for my undergrad degree which is now completed from SFE. I am paying out of my salary every month to SFE. I was wondering, let’s say my initial Loan was 36k, and now with interest it is around 45k. I am paying a small amount each month maybe £60. When is it counted as paying interest? Is the interest counted as being ‘mixed’ in with the whole amount or only counted after I have paid 36k in total. In other words islamically am I sinning right now or will I be sinning once the 36k is payed off and then I begin paying the interest?

Can anyone provide guidance of the best way to deal with my Loan situation islamically? Should I pay it all off? Should I continue with monthly payments?

W Salaam

Congratulations on completing your degree, and may Allah bless you for considering the implications of an interest bearing loan.

In the initial stages of paying back your student finance, you are unlikely to be even covering the accumulating interest each month. SFE will send you a statement each year, which shows you how much you have paid each month, and how much interest has been accumulated. You can also view this statement online:

Student finance is a strange one, because it behaves more like a tax than an interest bearing loan - given that repayments are very much conditional on your earnings. When researching the issue whilst I was at university, it seemed like the general consensus on the loan’s permissibility was still unclear.

However, I am not an expert in the matter and would encourage other brothers to chip in. IFG’s stance on the matter can be found here: