Ref. No. 2623/45-3985
In the name of Allah the most Gracious the most Merciful
The answer to your question is as follows:
Usurious and interest based dealing is a major sin in Islam. So, Interest based loan is not allowed. The holy Quran and Hadith warn those who go for interest based dealings. In Shariah, the interest money should be taken out from the bank and given freely to the poor without intention of getting reward. However, as you also have an account with the bank from which you took the loan, and from the same bank you got some interest amount. Therefore, you are allowed to pay the interest amount to pay to loan interest. But, you have to avoid such a usurious loan in the future.
ويردونها على أربابها إن عرفوهم، وإلا تصدقوا بها لأن سبيل الكسب الخبيث التصدق إذا تعذر الرد على صاحبه اهـ." (الدر المختار وحاشية ابن عابدين (رد المحتار (6/ 385
And Allah knows best
Darul Ifta
Darul Uloom Waqf Deoband
