Qard Hasan
Qard Hasan is lending money that is repaid in the same amount, with no increase and no benefit attached to the loan.
What it means for me: A qard hasan is an act of goodwill, not a way to earn a return on your money. Any condition attached to it that benefits the lender, beyond getting the same sum back, changes its nature entirely.
Example: A friend lends you money for rent and asks only for the same amount back next month, with nothing extra. That is a qard hasan: goodwill, not an investment.
Do not confuse with: Riba, an unjustified increase. A qard hasan returns exactly what was lent; any stipulated extra, however small, turns the same loan into riba instead.
If scholars differ: Scholars agree a stipulated increase turns a loan into riba. They differ on whether a voluntary, unstipulated increase at repayment is permitted. Some hold it becomes questionable once it turns into an expected custom rather than a genuine gesture.
See the term in context
What is an interest-free loan (Qard Hasan), and what are its conditions and rulings?
A loan is the act of giving money to be used by the borrower, who then repays its equivalent. Its purpose is to assist those in need. As for a "goodly loan" (Qard Hasan), it is given with a sincere intention and a…
Is it permissible to take a "Qard Hasan" (interest-free loan) to build an apartment for the purpose of marriage, knowing that the questioner lives in the family home and does not have the financial capacity to build?
There are two types of loans: a good loan (Qard Hasan) with no interest, which is unanimously permissible, and it is recommended to lend it and permissible to borrow it. The second type is an interest-bearing loan,…
Is it permissible to take out a loan from an Islamic bank, either a benevolent loan (qard hasan) or a murabahah loan, at an annual rate of 6% to pay off the apartment installment, contribute to building a plot of land, and settle the wife's debt, or is borrowing restricted to necessities only?
The legitimate Islamic controls are the basis for dealing with an Islamic bank. To learn about them concerning Murabaha and Tawarruq, please refer to fatwas no. 31451 and 31758.
Questions that use it
What is the Sharia ruling on the Jordan Islamic Bank's program to support small and medium-sized enterprises, which is based on a Qard Hasan (benevolent loan) product in exchange for administrative fees and specific guarantees, to confront the repercussions of the Coronavirus crisis? Is it permissible for someone in dire need to deal with it in order to save their business and employees, taking into account the current global economic situation?
What is the reward for a benevolent loan (Qard Hasan), and what is the reward for granting a debtor respite until he can afford repayment? And have there been any hadiths that encourage this?
Is it permissible to conclude a loan agreement between a parent company and its subsidiary—whether it is an interest-free loan (qard hasan) or an interest-bearing loan—to facilitate the transfer of funds between them, and in compliance with the state's accounting standards? And what is the ruling on drafting the agreement if it is not permissible?