Answered by Shaykh Faraz Rabbani
If a person is systematically paying back an interest-bearing student loan on a monthly basis and then comes across a large sum of money (that would clear the loan), is the person obligated to pay back the loan in its entirety immediately as soon as he receives the large sum of money? Or, can one continue to pay back the loan on a monthly basis and use the large sum of money to engage in buying a home using an interest-free loan from an Islamic organization as opposed to renting for many years trying to save for a home? An example:
Walaikum assalam,
In general, it would be disliked or impermissible to buy the home and not pay off the loan in such a situation.
Rather, one should repay the loan in full, and then slowly save until one has enough to buy the house, or arrange for the required amount through an Islamically accepted means of financing.
And Allah knows best.
Wassalam,
Faraz Rabbani
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