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Is a 'good loan' (Qard Hasan) that a company grants to employees in exchange for a fixed fee, proportional to the borrowed amount, Islamically permissible?

1 min readAlso available in العربية

A حسن (goodly) loan is one from which the lender does not derive any benefit, and its purpose is to show kindness to the borrower. If it yields a benefit for the lender, then it becomes an interest-based (riba) loan, because the jurisprudential rule states that "every loan that draws a benefit is usury (riba)." Therefore, the loan mentioned in the question is not permissible according to Sharia, and calling the interest a "fee" does not change the fact that it is usurious interest.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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