If one is paying monthly installments to financial institutions then this will not stop him from paying Zakat even if the loan exceeds the assets in his possession unless he wishes to pay the lump sum in the coming year.
It is mentioned in Alamgheeri: If Mahr is an overdue debt upon a person that he does not intend to pay then this debt will not stop him from paying Zakat.
The quotation from Alamgheeri refers to the Mahr which the husband does not intend to pay immediately as a lump sum, likewise the installment that a person pays is also not paid in a lump sum amount thus making it Waajid upon him to pay Zakat for the assets in one’s possession.
Allah and His Rasool know best.
Islamic Lifestyle Solutions