In the language, al-Qardh (loan) means cutting, in Islamic terminology, it means paying an amount of wealth to someone who wants to benefit from it, then he returns it to him later.
Its ruling
For those capable of giving loans, it is a recommended act (Mustahabb) to lend a loan. This is because Allaah says:
"Who is he that will lend, Allaah a godly loan: then (Allaah) will increase it manifold to his credit (in repaying), and he will have (besides) a good reward (i.e Paradise)."(Q57: 11)
The Prophet (sallaallaahu alayhi wasallam) said:
"Whoever relieves his brother of a difficulty from the difficulties of this world, Allaah will relieve him of a difficulty from the difficulties of the day of Resurrection." (Muslim).
Receiving loans
As for the one who receives a loan, it is permissible and allowed and there is no harm in it. This is because the Messenger of Allaah (sallaallaahu alayhiwasallam) himself borrowed a camel and here turned a better camel. Then he (sallaallaahu alayhiwasallam) said:
"Verily from the best of people are those who are the best of them in repaying loans."(Bukhari).
Conditions for lending
There are certain conditions that go along with lending a loan. Such includes;
*The amount of the loan should be known by measurement, weight and quantity.
*The description of the loan. If it is an animal, then its age must be known.
*The lender should be someone whose loan is valid.
*Thus a person may not loan that which he possessed not, neither can the insane or immature people give a loan.
Regulation for lending
As for the regulation for lending a loan; they include;
1. Owning by possession: Once the receiver of the loan takes possession of it, he owns it and the loan will be under his obligation.
2. It is possible to lend a loan for a fixed term. However it is better to lend a loan without a fixed term, in other to show gentleness and kindness towards the borrower.
3. If the loaned article remains in the same condition that it was in; on the day of receiving the loan, it is returned to the lender in that state. If the loaned article changes by a decrease or an increase. a similar thing to the loaned article should be returned to him, if a similar thing is available. Otherwise, he should repay its value.
4. If no expense is borne while carrying the loaned article, the receiver can return it to the lender wherever the latter wishes. Otherwise, the receiver of the loan has no obligation to repay it at other than its place (where he borrowed it).
5. The loan should not bring any profit to the lender. This is forbidden. The profit being referred to maybe in form of an increase in the loan, an improvement to it or any other benefit outside the concept of loaning in Islaam. [Note that the loan here refers primarily to goodly personal loans and not commercial lending on investment. Also, profit here refers to the interest that is pre-agreed at the start of the transactions].
Importantly, the lender and borrower should not agree in this regard because it is cursed by Allaah and His Prophet. (sallaallaahu alayhi wa sallam). Jabir narrated: Allaah Messenger (salalallaahu alayhi wa sallam) cursed the one who accept usury, the one who gives it, the one who records it and the two witnesses to it, saying: "They are all same," (Muslim)
However, if any increase is given by the borrower as a show of gratitude for the act of kindness from the lender, there is: no harm in that. Indeed the Prophet (sallaallaahu alayhi wa sallam) gave a choke camel in return for a small virgin camel that he had received as a loan. Then he (sallaallaahu alayhi wa sallam) said:
"Verily (Tom the best of people are the best of them in repaying their loans." (Bukhari)
This article was culled from the publications of Deen Communication Limited