If you are a Muslim student studying in the USA and looking for financial help then you should first look for money from your family members, friends, co-workers, etc. If you are looking for a halal student loan in the USA then you will find it very difficult to find a halal loan that will suit your requirements. Large loans from a bank or financial institution will charge you extra money no matter if the bank is marked as an Islamic institution. The only difference of an “Islamic loan” is the Islamic institution will call the extra money “fees” instead of interest.
- A student loan helps students continue their studies by paying associated fees like tuition, books, supplies, etc.
- If a student loan is interest free then it is considered as a halal loan for Muslim students
- Various Islamic institutions offer halal student loans for USA Muslim students with a number of benefits including longer repayment periods, lower fees, no penalties, etc.
- The conventional loans are not halal for Muslim students because they have an interest which is known as ‘Riba’ in Arabic
What Is A Halal Student Loan?
Halal is an Islamic word and it means lawful or permissible. In Islam, interest is strictly prohibited therefore Muslim students don’t take any type of loans with interest. Therefore, Muslim students living in the USA look for halal student loans. In the USA, there are many financial institutes available that cater to the needs of a Muslim student in America. Usually, these halal student loans come from various Islamic institutions. These Islamic institutions offer halal student loans with a number of benefits including longer repayment periods, lower fees, no penalties, etc. The conventional loans are not halal for Muslim students because they have an interest which is known as ‘Riba’ in Arabic. On the other hand, Muslim students can take a halal loan without interest.
How Can I Get An Islamic Loan In The USA?
If you want to get an Islamic loan in the USA then you have to follow the below steps –
1. First, you have to set up an online student money account
2. Then you have to log in and complete the online application
3. Provide all the required information and confirm this detail with your parents or partners
4. Finally, submit proof of identity to complete the process
List Of Interest-Free Student Loans In The USA
In the USA, it is very difficult to find interest-free student loans. In the USA, student loans are available at the bargain interest rate of 4.6 percent however, there are a handful of charities and colleges available that offers student loans that only require the borrowers to repay the amount they borrowed. The organizations listed below offer interest-free loans to students. Let’s check them out!
1. Abe And Annie Seibel Foundation
This foundation offers loans of up to $6,000 to students who are Texas residents and attend Texas colleges. This foundation doesn’t have a website but you can contact at (409) 770-5665.
2. Bill Raskob Foundation
This foundation offers loans of up to $8,000 to about 60 sophomores, juniors, or seniors. You can apply for loans that range from $3,000 to $5,000.
3. Central Scholarship Bureau Of Maryland
Central Scholarship Bureau of Maryland usually offers loans of up to $10,000 to about 150 Marylanders. You have to find an adult to cosign or commit to repaying this loan to qualify for the loan. If you are a student looking for a halal student loan then it is a good option for you.
4. Evalee C. Schwarz Charitable Trust For Education
This charitable organization offers loans of up to $15,000 to students who have grades and scores in the top 10 percent. If you have Expected Family Contributions below $4,600 and you attend in-state schools then you will be eligible for this loan.
5. Jewish Free Loan Association
This loan association offers loans of up to $3,500 to about 650 Los Angeles residents of any religion. This organization accepts loan applications throughout the year. If you are a Muslim student living in the USA then you can apply for this loan program.
6. Leo S. Rowe Pan American Fund
It offers loans of up to $7,500 to about 70 upperclassmen who are citizens of Latin American or Caribbean nations and want to study in the United States and they will return to their country after completing their studies. This loan program also accepts applications throughout the year.
7. Massachusetts No Interest Loan
If you are a Muslim undergraduate and a permanent resident of Massachusetts and attend Massachusetts colleges then you can apply for this loan program. You can get a loan of up to $5,000.
8. Military Officers Association Of America Scholarship Fund
This fund offers loans of up to $5,500 to about 1,500 children of active or retired military persons who have a grade point average of at least 3.0. The application deadline is March 1.
9. Scholarship Foundation Of St. Louis
This foundation offers loans of up to $5,000 a year to about 600 low-income students who live in the St. Louis area. The deadline for this loan program is November 15 and April 15.
FAQs About Halal Student Loans In The USA
Are Student Loans Halal?
Student loans that are free of interest are halal. Usually, most banks and financial institutes offer loans with an interest rate that are not halal loans. So, if you are a Muslim student then you should look for loans that don’t have interest in it.
Is There Any Islamic Bank In The USA?
The only exclusively shariah-compliant and Islamic bank in the USA is University Islamic Financial. This is a subsidiary of University Bank. There is also a large Islamic mortgage lender available in Lariba, California, and it also provides business financing.
Which Banks Give Student Loans In The USA?
Usually, most of the private banks in the USA give student loans. One of the reliable banks for student loans are Citibank.
1. Wells Fargo
4. Sallie Mae, etc.
These banks offer various loan programs that include –
1. Undergraduate Student Loans
2. Graduate Student Loans
3. Loans for Medical School
4. Loans for Law School
5. Student loans for the Bar Exam
6. Private student loans, etc.
Is Taking Loan Haram In Islam?
If the loan has an interest, then that loan is haram in Islam. However, if there is no interest with the loan then that loan is not haram and as a Muslim, you can take that type of loan.
What Is A Halal Loan?
According to Sharia-compliant finance, a loan is halal if the financial institutes share in the profit and loss of the loan borrower.
Which Banks Offer Halal Loans For Students In The USA?
The top three banks that offer Islamic financial services and halal loans for students in the USA are –
1. The American Islamic Finance House University Bank
2. University Islamic Financial
3. Harvard Islamic Finance Program
Last Updated on October 18, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.