There is no halal personal loan from a UK bank. On 20 September 2026 Al Rayan Bank listed savings, Premier Banking and property finance; Gatehouse Bank listed savings and home finance. Neither offers unsecured borrowing, and no other UK-authorised Islamic firm does either. What exists instead is a set of narrower routes: an interest-free loan (qard hasan) from family or a community fund, a hardship grant from the National Zakat Foundation if you qualify, an employer advance, 0% retail finance under strict conditions, and, if the need is really a debt emergency, free advice and the statutory Breathing Space scheme. This page maps each route to the amount you need and names the conditions. The halal banking hub lists the institutions behind them.
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What UK Islamic banks actually offer, checked on 20 September 2026
Al Rayan Bank's personal product list is Everyday Saver, fixed term deposits, Premier Banking (a current account for customers with £50,000 on deposit or home finance of £500,000 or more) and Home Purchase Plans. Gatehouse Bank's is easy access, notice and fixed term Woodland Savers, cash ISAs and Home Purchase Plans. Nomo, run by BLME, offers current accounts and property finance to non-UK residents only. Algbra and Kestrl are e-money apps with prepaid cards and no lending. None of them lists a personal loan, a car loan or a line of credit, and none advertises one as coming.
That absence is structural, not an oversight. A Shariah-compliant loan for cash must be either qard hasan, where the lender receives nothing back but the principal and a regulated bank cannot build a business on it, or a Tawarruq facility, where the bank sells you a commodity on deferred payment and you sell it for cash; UK banks have used Tawarruq for large home finance (Al Rayan's Premier Home Finance is Commodity Murabaha) but not for small unsecured sums, where the cost of the commodity trades and regulation outweighs the margin. Until that changes, "halal loans UK" is a search with no bank product behind it.
Every route that is open, in one table
| Route | Typical amount | Cost to you | Who qualifies | Shariah status |
|---|---|---|---|---|
| Qard hasan from family, friends or a mosque fund | £100 to a few thousand pounds | Nothing; lender may not receive any benefit | Anyone with a willing lender | Permissible; the model Islamic loan |
| NZF Hardship Relief Fund or Housing Fund | Grants towards monthly living costs, rent or council tax arrears | Nothing; it is a grant, not a loan | Muslims in the UK in need, applying online with an email address and mobile number | Permissible; it is zakat, not borrowing |
| Employer salary advance or interest-free staff loan | Usually up to one month's pay, or a season ticket | Nothing if the employer charges no interest or fee for credit | Employees whose employer offers it | Permissible when interest-free |
| 0% retail or car finance at the cash price | Price of the item | Nothing if paid on time; late fees are the trap | Credit check by the retailer's finance partner | Permissible with conditions; see below |
| Credit union loan | £50 to several thousand pounds | Interest, capped by law at 1% a month on the outstanding balance or another rate the Treasury specifies | Members within the common bond | Impermissible; it is interest |
| Conventional personal loan or overdraft | Any | Interest | Credit check | Impermissible |
| Free debt advice plus Breathing Space | Not a loan; freezes existing debts | Nothing | Residents of England and Wales with problem debt, via a debt adviser | Permissible and often the right answer |
Qard hasan: the only true Islamic loan, and how to do it properly
Qard hasan is a loan where the lender gets back exactly what was lent, nothing more, and any benefit to the lender that is stipulated or expected turns it into riba. In Britain it happens inside families, between friends, and through mosque or community funds that lend small sums for weddings, funerals, car repairs or a deposit shortfall. There is no register of such funds and most run on trust, so the practical advice is about doing it well rather than finding it.
- Write it down. The Quran instructs that a debt for a fixed term be recorded; a one-page agreement stating the amount, the repayment dates and that no additional sum is due protects both sides and the relationship.
- Fix the schedule and keep it. A qard hasan is a debt, not a gift; the borrower owes repayment on the agreed dates and the lender is entitled to ask for it.
- Give nothing back beyond the principal that was a condition of the loan. A voluntary gift from the borrower at repayment, not agreed in advance, is permitted by the majority of scholars; an agreed or customary extra is not.
- Be suspicious of any website advertising "qard hasan loans, apply online". Lending money to UK consumers requires FCA authorisation, and an unregulated firm promising interest-free cash is either a charity grant in disguise or something to walk away from.
- If you are the lender, lend what you can afford to lose and treat a default as a test of patience; the Quran also instructs giving a struggling debtor time, and forgiving the debt as charity if you can.
NZF grants are not loans, and that is the point
The National Zakat Foundation distributes zakat collected in Britain to Muslims in Britain, and its application page sets out three funds. The Hardship Relief Fund provides cash grants towards monthly expenses such as food and clothing for people unable to pay for basic living costs. The Housing Fund offers grants to help people live in affordable, liveable and safe accommodation, which in practice covers rent arrears, council tax arrears and moving costs. A third programme funds skills, qualifications and routes into work. To apply you need your own email address, a mobile phone number and an internet-connected device; NZF assesses need and does not expect repayment, because zakat is a transfer of ownership to the recipient.
If your need for a loan is really a gap in rent, bills or food, NZF is the first door to knock on, not the last, because a grant resolves the shortfall where a loan only moves it. If you are the person with surplus rather than need, this is also where a large part of the answer to "where do Muslims borrow" lies: the money paid in as zakat is what makes the grants possible.
Employer advances, season ticket loans and the salary-advance apps
Many UK employers lend interest-free: an annual season ticket loan repaid through payroll, an advance of one month's salary for a new starter, a hardship loan from a staff welfare fund. These are qard hasan in all but name and are the easiest halal borrowing most employees never ask about. Check your staff handbook or ask HR; the loan is usually a deduction from future pay with no charge.
The salary-advance apps that let you draw earned wages before payday are different. They charge a flat fee per withdrawal rather than interest, and scholars are divided on whether a fixed fee for accessing money you have already earned is a permissible service charge or a disguised return on credit. The amount is small and the structure varies by app, so treat it as a question for your scholar rather than a settled route, and never use one to roll from one month into the next.
0% retail credit: permissible only if the small print stays clean
Buying a sofa, a laptop or a car on 0% finance is a deferred sale, which Shariah permits, provided the credit price equals the cash price, no interest is charged at any point including on default, and the agreement is with the seller or a finance partner acting as seller rather than a loan of cash to you. Where those conditions hold, the arrangement is close to a Murabaha with no mark-up. Where they do not, it is a loan. The usual breaks are an interest clause that activates after a promotional period, a higher price for finance than for cash, and late fees that scale with the outstanding balance over time rather than covering the lender's actual costs. Our rulings on whether Klarna and buy now pay later are halal and on halal car finance go through specific agreements clause by clause.
Why a credit union's "low interest" is still interest
Credit unions are often suggested to Muslims as an ethical alternative, and in conventional terms they are: they are member-owned, not-for-profit and limited by statute in what they can charge. Section 11(5) of the Credit Unions Act 1979 permits a credit union to charge interest on loans at a rate not exceeding one per cent a month on the amount outstanding, or such other rate as the Treasury specifies. That is the whole problem. The statute calls it interest because it is interest: a fixed return on a loan of money, however modest. A credit union loan is cheaper than a payday loan and kinder than an overdraft, but it is not halal, and nothing in the common bond or the cooperative structure changes that.
If the real need is a debt emergency: free advice and Breathing Space
A large share of people searching for a halal loan are not trying to buy anything; they are trying to pay off something that is already charging interest. In that case a new loan, halal or not, is the wrong tool. gov.uk's Breathing Space scheme gives residents of England and Wales temporary protection from creditors for up to 60 days, during which creditors cannot add interest or charges to the debt or take enforcement action. You apply through a debt adviser, who submits the application if it is right for you; MoneyHelper lists free advisers available online, by phone and in person. If you are receiving mental health crisis treatment, the protection lasts for the length of treatment plus 30 days. In Scotland the equivalent is a Debt Payment Programme under the Debt Arrangement Scheme.
Use the 60 days to get a full picture: which debts are priority (rent, council tax, energy, court fines), which are interest-bearing, and what a sustainable budget looks like. A debt adviser can then negotiate a plan, which may freeze interest for longer than the statutory window. From a Shariah standpoint, repaying interest you already owe under a contract you signed is a debt you must discharge; the sin was in taking it, and the way out is to settle it as fast as possible and never take another. Building the halal emergency fund that would have prevented the loan is the next step after the plan is in place.
The verdict by amount: £500, £3,000 and £10,000
For £500 or less, the order is: your own emergency savings, a qard hasan from family or a friend with a written repayment date, an employer advance, and, if the need is food, rent or bills rather than a purchase, an NZF grant application. Do not take a credit union loan or an overdraft for this sum; the interest on £500 is small but the contract is still riba.
For around £3,000, a written qard hasan from family remains the first route, and a mosque or community fund the second. If the money is for a specific purchase, 0% retail finance at the cash price with no interest clause is permissible and often available. If it is for a car, the halal car finance market has real products. If it is to consolidate interest-bearing debt, go to a free debt adviser first and ask about Breathing Space; consolidation loans are the route by which a £3,000 problem becomes a £6,000 one.
For £10,000 or more, there is no halal unsecured route in Britain in 2026. The honest options are to delay and save, to structure the need as a partnership rather than a loan (a relative invests in the venture and shares the outcome), or to attach the finance to an asset: a Home Purchase Plan with additional finance for home improvements, which our halal mortgage alternatives hub covers, or asset or revenue-based finance for a business, which our guide to business financing without riba explains. If none of those fits, the answer is that the thing you want to buy with borrowed money has to wait, and the is it halal hub can help you check the alternative products you are offered in the meantime. Facts checked against alrayanbank.co.uk, gatehousebank.com, nomobank.com, nzf.org.uk, gov.uk, legislation.gov.uk on 20 September 2026.
Frequently asked questions
Does any UK bank offer a halal personal loan?
No. On 20 September 2026 Al Rayan Bank's personal range was savings, Premier Banking and property finance, and Gatehouse Bank's was savings and home finance. Nomo serves non-UK residents only and does not lend unsecured. No UK-authorised Islamic firm offers a personal loan, car loan or line of credit, and the economics of Tawarruq at small sums make one unlikely soon.
What is a qard hasan and where can I get one?
A qard hasan is an interest-free loan in which the lender receives back only the principal, with no agreed or expected benefit. In the UK it comes from family, friends, employers and mosque or community funds rather than from regulated lenders. Write the amount and repayment dates down, repay on schedule, and avoid any website advertising online qard hasan loans, since consumer lending requires FCA authorisation and an unregulated offer is a warning sign.
Are credit union loans halal?
No. Section 11(5) of the Credit Unions Act 1979 allows a credit union to charge interest on loans at up to one per cent a month on the outstanding balance, or another rate the Treasury specifies. The rate is low and the institution is cooperative, but the return is interest on a loan of money, which is riba. A credit union is a better conventional lender, not a halal one.
Is 0% finance halal?
It can be. A deferred sale at the same price as cash, with no interest at any stage including on default, and contracted with the seller or its finance partner rather than as a cash loan, is permissible. It stops being halal if an interest clause activates after a promotional period, if the finance price exceeds the cash price, or if late fees are calculated as a return on the balance over time. Read the agreement, not the advert.
Can I get help with debt without taking another loan?
Yes. In England and Wales the Breathing Space scheme stops creditors adding interest or charges and taking enforcement action for up to 60 days, applied for through a free debt adviser found via MoneyHelper. Scotland has the Debt Arrangement Scheme. For Muslims unable to meet basic living costs or housing costs, the National Zakat Foundation offers grants through its Hardship Relief Fund and Housing Fund, which do not have to be repaid.
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See side-by-side comparisons of Shariah-compliant products, or let our matcher recommend the best options for your situation.
Is it a sin to repay interest on a loan I already have?
Repaying a debt you contractually owe, including its interest, is discharging an obligation, and scholars treat the wrong as having been in entering the contract rather than in settling it. The duty is to clear it as quickly as possible, to avoid any new interest-bearing agreement, and to seek forgiveness. Free debt advice can often freeze or reduce the interest element, which shortens the period you are paying it.
