This page is general educational information, not financial advice and not a religious ruling. It has not been reviewed by a scholar and no scholar has endorsed it. Whether a specific product is acceptable is a question for a qualified scholar.
We are not aware of any mainstream Sharia-compliant personal loan in the UK designed to clear consumer debt. Islamic finance here is built around buying things: homes, business assets and cars. Al Rayan Bank, one of the UK's largest Islamic banks, announced in 2022 that it was focusing on property and premier banking, and at the time of writing its published personal range does not include personal loans, overdrafts or credit cards. Product ranges change, so always check a provider's own website. What does exist for someone in hardship are small interest-free loans and grants from Muslim charities, usually in the hundreds rather than the thousands. So for most people the question is not which halal loan to take. It is how to deal with the debt you already have without adding any new interest to it, which is a different job entirely.
What Islamic finance in the UK actually covers
- Home purchase plans. This is the bulk of the market, with providers including Al Rayan, Gatehouse and UBL UK offering them at the time of writing. MoneyHelper has a plain-English explainer of how they work.
- Business finance. Providers such as Qardus finance small and medium-sized businesses rather than household costs.
- Car finance. A newer and growing area with providers entering the market.
- Savings and investments. Several banks and app-based providers offer Sharia-compliant accounts.
- Personal borrowing to clear existing debt. This is the gap. We are not aware of a mainstream product built for it.
You may see the word murabaha, where a provider buys an item and sells it to you for a higher agreed price paid over time. That structure is for acquiring something. It is not built to settle a balance you already owe on a credit card.
What does exist, and what it is really for
Qard hasan is a loan given as a goodwill act, where you repay exactly what you borrowed and nothing more. In the UK it comes from charities rather than banks, and the sums are modest because the funds come from donations and zakat.
- Ansar Finance (registered as Ansar Finance Group Limited, charity number 1156023) has been lending interest free since 1994 and says it has granted over £4.5 million in interest-free loans. Its website states that people who are not donors may apply for a personal loan of up to £1,000, and longer-standing donors for more, repayable over 24 months. It sets its own conditions, which at the time of writing include a guarantor, proof of income, indefinite leave to remain and an application fee. It also runs a zakat and hardship fund.
- Al-Mizan Charitable Trust says it provides small grants and interest-free loans of up to £500, with an average grant of around £200 to £250, and that it can support only about half of the eligible applications it receives each month. Its published grants policy excludes clearance of debt, including rent and council tax arrears, so it is a fund for immediate living costs rather than for paying off what you owe.
- The National Zakat Foundation runs a hardship fund giving cash grants towards basic living costs for people in the UK who meet its zakat-eligibility criteria. It applies its own rules, including a limit on how often the same household can receive a grant.
Each has its own eligibility rules and its own application process, and the figures above are what they publish rather than a promise of what you would receive. These funds are built for immediate hardship, a bill that cannot wait or a family that needs food this week. They are not designed to clear a five-figure balance, and it would not be fair to them or to you to present them that way. We are not connected to any of these organisations and we are not paid by them.
Provider details last checked 17 August 2026. Terms change, so check each organisation's own website before applying.
Why borrowing more rarely helps, even when it is structured correctly
Put the religious question aside for a moment, because there is a plainer problem underneath it. Borrowing to pay off borrowing moves a debt rather than removing it, and usually adds a fresh set of terms and a new company to deal with. Free debt charities such as StepChange and MoneyHelper give the same general warning about consolidation loans, and the arithmetic of it does not change according to how an agreement is worded. It will not be the wrong answer for everyone, which is why it is worth putting to a free adviser before you commit.
If someone is struggling to keep up with what they already owe, adding another commitment on top is usually the thing that turns a difficult situation into an impossible one. Whether a particular product is acceptable in Islamic terms is a question for a qualified scholar. Whether it would actually improve your situation is a question for a debt adviser. Both are worth asking, and neither is answered on this page.
Questions worth asking any finance provider
Most providers in this space are careful and sincere. But an Islamic label in marketing is not the same thing as the contract you sign, and the only way to know what you are agreeing to is to ask. Nothing below is a comment on any organisation named on this page, which we list only because they publish what they do. You are entitled to a straight answer to every one of these:
- Are you authorised by the Financial Conduct Authority? You can check a firm yourself on the FCA register, free, in under a minute. Not every organisation needs to be on it: charities and not-for-profit lenders often sit outside FCA authorisation, and that on its own is not a sign that anything is wrong. If a commercial firm is offering you credit and is not on the register, that is worth asking about.
- What is the total I will repay, in pounds, against what I receive today? Ask for that figure in writing, along with how any difference is calculated and what it is for. That is exactly the detail a scholar will want if you take the question to one.
- What happens if I miss a payment? Late fees that scale with delay are worth putting to a scholar.
- Who reviewed this structure, and can I see it? Providers with Sharia supervision will usually name the scholars or board involved and be able to show you the certification.
- Is this actually the right thing for my situation? Ask a free debt adviser, who has no product to sell you.
What you can do instead, without taking on new borrowing
The UK has established routes for reorganising debt you already have that do not involve taking out any new borrowing at all. Whether interest already running on your existing debts is reduced, frozen or stopped depends on the route and on each creditor, and it is never guaranteed. These routes differ a great deal in who can use them, what they cost and what they affect, including your credit file. We explain how they work through an Islamic lens on our halal debt relief page, and if interest already running on your debts is what weighs on you, our page on paying interest on debt covers that question in more detail.
We do not decide which route fits you and neither does this page. Only a regulated adviser who has looked at your full situation can do that.
Free help, whichever route you take
Free debt advice is available from StepChange, Citizens Advice and National Debtline, and MoneyHelper, which is government backed, can point you to a free adviser near you. They cover every option, including the ones nobody is paid a referral fee for. For interest-free hardship help, see our Urgent help page.
Ask any adviser to explain why they are pointing you towards one option rather than another, and how they are paid. You are entitled to that answer from anyone, including us.
If things feel unbearable, please talk to someone. Samaritans, free, 116 123, any time of day or night.