Ruling on helping someone who has repented from riba-based transactions by paying off his loan
If a person has repented from riba-based transactions, has resolved not to go back to them and regrets having done that, but he cannot avoid paying this interest, because the system obliges him to pay off the loans with the interest, otherwise he will be arrested and put in prison, then there is nothing wrong with helping him to pay off this debt and the resulting interest, and there is no sin on the one who helps him to do that, because this is helping to relieve a Muslim of distress.
The Prophet (blessings and peace of Allah be upon him) said: Whoever relieves a Muslim of distress, Allah will relieve him of distress on the Day of Resurrection.
Narrated by al-Bukhaari (2442) and Muslim (2580).
And because every time there is a delay in paying off the debt, the interest accumulates further.
The scholars have stated that if a person who is in debt for something haraam repents to Allah, there is nothing wrong with giving him zakaah funds to pay off his debts.
Shaykh Muhammad ibn ‘Uthaymeen (may Allah have mercy on him) said:
Question: if a person is in debt for something haraam, can we give him zakaah?
Answer: If he has repented, we may give him, otherwise we do not give him, because this comes under the heading of helping him with something haraam, hence if we gave to him, he would take out another loan.
End quote from ash-Sharh al-Mumti‘, 6/235
Dr. ‘Umar Sulaymaan al-Ashqar said: If a person has got into debt by way of riba, it is not permissible to pay off his debt from zakaah funds allocated for debtors, unless he has repented and given up dealing in riba.
End quote from Abhaath al-Nadwah al-Khaamisah li Qadaayaa az-Zakaah al-Mu‘aasirah, p.210
But in the case of one who has not repented from riba-based transactions, and only wants to solve his problem, and if his debt was paid off, he would not mind going back to dealing in riba again, then it is not permissible to help such a person to pay off his debt, because that comes under the heading of helping him in sin and transgression, which is not permissible.
And Allah knows best.