Qard Hasan
Qard Hasan means a good loan - money lent without interest and repaid in the same amount. The Qur'an uses the phrase for charity itself, describing giving as a loan to Allah. In practice it is the only form of lending Islamic law permits.
HAF's work with families in financial hardship is funded through its Sadaqah appeal.
What the Words Mean
Qard comes from a root meaning to cut. A loan is a piece cut off from your own wealth and handed over, with the understanding that the same amount comes back.
Hasan means good, or fine, or beautiful. Together: a loan given well.
In Urdu you will hear it as qarz-e-hasana. Same thing.
The Qur'an Calls Charity a Loan
This is the part worth pausing on.
Six times, the Qur'an describes giving in the path of Allah not as a gift but as a loan - qardan hasanan, a goodly loan - made to Allah Himself, which He will repay multiplied (Qur'an 2:245, 5:12, 57:11, 57:18, 64:17 and 73:20).
Think about what that image does. A gift is gone once given. A loan is owed back. By choosing the second word, the Qur'an describes charity as something that remains outstanding in your favour - not spent, but lent, with a return promised by the most reliable of debtors.
One of the verses puts a question rather than an instruction: who is it that will lend to Allah a goodly loan, so that He may multiply it many times over?
Why Lending Is Itself an Act of Charity
Because the Qur'an used lending as its picture of charity, Islamic law treats lending as belonging to charity rather than to commerce.
A loan is not a transaction you may profit from. Anything added to the sum lent, stipulated at the outset, is riba. So in practice, every loan Islamic law permits is a qard hasan - the adjective describes what the thing already has to be.
There is a well-known narration that lending carries more reward than giving, on the reasoning that someone who asks for a loan is in greater need than someone who asks for charity. It is reported from Anas ibn Malik in Sunan Ibn Majah, where it is graded weak, and in a parallel version through Abu Umamah that some specialists have graded fair and others weak. It is quoted very widely without any of that being mentioned.
The thought underneath it stands on its own without the narration: a person who asks to borrow is usually a person who would rather not ask at all.
The Rules of a Qard Hasan
Four points cover almost everything.
The same amount comes back. Not more. An increase agreed in advance, however it is described, is the thing Islamic law forbids.
A borrower may repay more of their own accord. The Prophet Muhammad ﷺ once borrowed a young camel and returned a better one, saying that the best people are those best in repaying. The difference is that nothing was agreed - a borrower's gratitude is theirs to express, and a lender's expectation is not theirs to impose.
Security and guarantors are allowed. A lender may take collateral or ask for someone to stand behind the loan. Lending generously does not require lending carelessly.
Write it down. The longest verse in the Qur'an is about recording debts - who, how much, and witnessed (Qur'an 2:282). Informal lending between friends and relatives is where most disputes begin, and the instruction is plain.
When the Borrower Cannot Repay
The Qur'an addresses this directly, and it is not what a commercial system would say.
If someone is in difficulty, give them time until their circumstances ease. And if you forgive the debt as charity, that is better for you - if only you knew (Qur'an 2:280).
Two options, in that order. Not pressure, not penalties. Time first, and forgiveness as the better course.
The Prophet ﷺ taught that someone who gives relief to a person in difficulty, or waives what they are owed, will find shade on a day when there is none.
Qard Hasan in Britain
The idea is not confined to classical texts.
A number of British Muslim organisations now run interest-free lending funds: small sums for emergencies, for moving costs, for replacing a broken boiler, for getting through a gap in work. They exist because the alternative on offer is often a payday loan at a rate that turns a short problem into a long one - the situation described on the Gharimin page, where debt becomes grounds for receiving Zakat.
A fund like this sits in an interesting place. It is not charity, because the money comes back. It is not banking, because nobody profits. It is somewhere between the two, and it can help the same pound several times over.
If that appeals to you, ask whether an organisation runs one, and what happens when a borrower cannot repay.
Frequently Asked Questions
Generally no, and the reason is instructive. Zakat has to become the property of the person who receives it, which is the principle set out on the Tamlik page. A loan does not transfer ownership permanently - it comes back. Some contemporary scholars have discussed revolving funds, but the established position is that Zakat is given rather than lent. Voluntary charity can fund such a scheme without difficulty
No, not as a condition. The increase is forbidden however it is labelled - a fee, a gift expected at the end, a share of something. What is permitted is the borrower deciding, entirely on their own, to return more than they took. The distinction is whether it was agreed.
This is the live question for organised schemes, and the answer has to be handled carefully. Many contemporary scholars allow the recovery of genuine, demonstrable costs of running the loan - processing, record-keeping - on the basis that these are real expenses rather than a return on the money. What is not allowed is a charge set as a percentage of the amount lent, which is interest under another name. Any organisation running such a fund should have this confirmed by a scholar rather than designed by an accountant.
Yes. Neither is in tension with the loan being charitable. Taking reasonable steps to be repaid is sensible, and nothing requires a lender to pretend the risk does not exist.
Both are good and the circumstances differ. Lending suits someone facing a temporary gap who will be able to repay. Giving suits someone who will not. A narration often quoted says lending carries the greater reward, though its chain is disputed, as noted above. The more useful question is which of the two would actually help the person in front of you.
The Rules of a Qard Hasan
Four points cover almost everything.
The same amount comes back. Not more. An increase agreed in advance, however it is described, is the thing Islamic law forbids.
A borrower may repay more of their own accord. The Prophet Muhammad ﷺ once borrowed a young camel and returned a better one, saying that the best people are those best in repaying. The difference is that nothing was agreed - a borrower's gratitude is theirs to express, and a lender's expectation is not theirs to impose.
Security and guarantors are allowed. A lender may take collateral or ask for someone to stand behind the loan. Lending generously does not require lending carelessly.
Write it down. The longest verse in the Qur'an is about recording debts - who, how much, and witnessed (Qur'an 2:282). Informal lending between friends and relatives is where most disputes begin, and the instruction is plain.
The Qur'an addresses this directly, and it is not what a commercial system would say.
If someone is in difficulty, give them time until their circumstances ease. And if you forgive the debt as charity, that is better for you - if only you knew (Qur'an 2:280).
Two options, in that order. Not pressure, not penalties. Time first, and forgiveness as the better course.
The Prophet ﷺ taught that someone who gives relief to a person in difficulty, or waives what they are owed, will find shade on a day when there is none.
The idea is not confined to classical texts.
A number of British Muslim organisations now run interest-free lending funds: small sums for emergencies, for moving costs, for replacing a broken boiler, for getting through a gap in work. They exist because the alternative on offer is often a payday loan at a rate that turns a short problem into a long one - the situation described on the Gharimin page, where debt becomes grounds for receiving Zakat.
A fund like this sits in an interesting place. It is not charity, because the money comes back. It is not banking, because nobody profits. It is somewhere between the two, and it can help the same pound several times over.
If that appeals to you, ask whether an organisation runs one, and what happens when a borrower cannot repay.
Frequently Asked Questions
Generally no, and the reason is instructive. Zakat has to become the property of the person who receives it, which is the principle set out on the Tamlik page. A loan does not transfer ownership permanently - it comes back. Some contemporary scholars have discussed revolving funds, but the established position is that Zakat is given rather than lent. Voluntary charity can fund such a scheme without difficulty
No, not as a condition. The increase is forbidden however it is labelled - a fee, a gift expected at the end, a share of something. What is permitted is the borrower deciding, entirely on their own, to return more than they took. The distinction is whether it was agreed.
This is the live question for organised schemes, and the answer has to be handled carefully. Many contemporary scholars allow the recovery of genuine, demonstrable costs of running the loan - processing, record-keeping - on the basis that these are real expenses rather than a return on the money. What is not allowed is a charge set as a percentage of the amount lent, which is interest under another name. Any organisation running such a fund should have this confirmed by a scholar rather than designed by an accountant.
Yes. Neither is in tension with the loan being charitable. Taking reasonable steps to be repaid is sensible, and nothing requires a lender to pretend the risk does not exist.
Both are good and the circumstances differ. Lending suits someone facing a temporary gap who will be able to repay. Giving suits someone who will not. A narration often quoted says lending carries the greater reward, though its chain is disputed, as noted above. The more useful question is which of the two would actually help the person in front of you.