Is it permissible to pay off a loan with a new loan to avoid legal accountability and to cancel the interest accrued on the first loan, which its owners refused to pay in installments?

A loan is permissible to show kindness and help those in need, and it must be for the sake of Allah, without interest. The debtor must fulfill the rights of the creditors. If the debtor is in straitened circumstances, the creditor must grant him a respite. It is not permissible to borrow with interest, even if it is agreed to drop the interest upon early repayment, because it is the usury of the جاهلية (pre-Islamic era of ignorance). The creditor must grant a respite to the one in straitened circumstances, as Allah Almighty says: "And if there is one in [financial] difficulty, then [let there be] a delay until [a time of] ease." There is no harm in a good loan or a purchase on credit if it is paid back.