Zakaah on loans
Question:
Assaalaam Alaikum.
I owe someone $9000.00 but I can pay a little at a time. I have $10000.00 this Ramadhan, do I pay zakaat from that or continue to just pay back my loan which I pay about $500.00 a month?
Answer:
Wa Alaikum As Salaam,
If you have a formal agreement with the lender that you will pay $500.00 per month, then you should pay this amount and then pay Zakaah on the remaining amount if a year had passed over your wealth which had reached the Nisaab.
If however, you do not have a formal agreement and you are expected to pay out the loan as soon as possible, then you will be required to pay the $9000.00 and then look to see if you have a Nisaab on your savings of your personal money.
And Allah Knows Best
Mufti Waseem Khan
2/8/2011