Free Interest Loan
Free Interest Loan (Qarz Al-Hasaneh)
Qarz Al-Hasaneh is a loan extended on a goodwill basis, mainly for welfare purposes.
The borrower need only to have membership, pay back the amount they borrowed, with no interest. On principle, Islam does not allow interest.
Should a borrower encounter difficulty, the lender must extend the repayment time. They can voluntarily waive repayment of part of the loan, or all of it.
The Qur’an encourages Muslims to provide Qarz Al-Hasane, benevolent loans, to “those who need them”:
“Who is he that will give Allah Qarz Al-Hasaneh? For Allah will increase it manifold to his credit.” (Qur’an 57:11)
“If you give Allah Qarz Al-Hasaneh … he will grant you forgiveness.” (Qur’an 64:17)
“Establish regular prayer and give regular charity and give Allah Qarz Al-Hasaneh.” (Qur’an 73:20).
Islam allows a cash loan as a form of social service among the rich to help the poor and those needing financial assistance. Qarz Al-Hasaneh can be seen as something between giving charity and giving a loan.
A borrower may as a token of appreciation choose to pay an extra amount to the lender, which is over the amount they borrowed. They must not promise to do so. As the only kind of loan that does not gain interest over time, it does not violate the prohibition on riba, interest.
Non-profit Islamic microfinance institutions – including those set up by Islamic Relief – now provide Islamic social lending to our group members.
Loans can be requested by those who have been a member of Hedayat Center for at least 6 months