Loan (Qardh) In Islam

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Loan in Islam
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Qadh (loan) is to give a certain amount of money to someone for his use with a promise to return the same amount later. It also includes lending a person some property such as a material or an animal for a certain period with a promise to return the same when the stipulated period is due.

What is the ruling of Qardh?

It is a recommended and desirable act. Allah says:

Loan in Islam

“Who is he that will lend to Allah a goodly loan, then (Allah) will increase it manifold to his credit (in repaying), and he will have (Mesides) a good reward (i.e. Paradise).” Al-Hadi’d 57:11

The Messenger of Allah (Peace and Blessings of Allah be upon him) said, “He who alleviates the suffering of a brother out of the sufferings of the world, Allah would alleviate his suffering from the sufferings of the Day of Resurrection.” (Recorded by Muslim, Abu Dawood and others on the authority of Abu Hurayrah ­(may Allah be pleased with him) This is for the lender.

As for the borrower, it is permissible for a Muslim to borrow and there is nothing wrong in that (as long as what he borrows is lawful). The Messenger of Allah had himself borrowed a young camel and voluntarily paid back with an adult camel. He then said, “The best of the people is the best of them in terms of paying back (a debt or borrowed property).” (Recorded by Muslim, Maalik, Abu Dawood and others)

What are the conditions of Qardh?

  1. The exact amount, weight or number of the property to be lent or borrowed must be specified.
  2. The description and age must be known if it is an animal.
  3. The person lending out an item must be someone who is legally permitted to donate things. As such, a person who owns nothing or a minor or an insane is not allowed to lend out anything.

What are its major regulations?

The borrower possesses the item by receiving it and therefore, he becomes responsible for it.

It is permissible to lend out an item for a specific period. However, lending out items without specifying a period for its return is more meritorious for it means showing compassion to the borrower.

If the item remains intact as it was the day it was borrowed, then it is returned to the owner. But if there is a change of addition or omission in it, the equivalent of what is borrowed is returned -if it has an equivalent. But if it does not have any equivalent, then its value in money should be returned to the lender.

If there is no additional burden in carrying the borrowed item, it is permissible to return it to the lender anywhere he likes. But if carrying it involves an additional burden for the borrower, then he is not obliged to return to the lender except at the place where he borrowed it from.

It is forbidden for the lender to derive any benefit whatsoever be lending the item to others, whether such benefit is in terms of getting more than what he lent out or getting what is better than what he lent out or any other benefit that results from his lending out the item, if that is mentioned in the lending agreement between both the lender and the borrower. However, if the benefit is a mere act of kindness from the borrower, there is nothing forbidden in that. For, the Prophet gave a bigger and fully grown camel in return for a young camel he borrowed from one of his Companions and said, “The best of the people is the best of them in terms of paying back (a debt or borrowed property).”

 

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Loan (Qardh) In Islam
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