ABSTRACT
Giving and receiving loans (qarḍ) is not only permissible but highly recommended in Islam. It is established that that the faithful may engage in lending and borrowing money or tangible articles on condition that the equal is returned afterwards. Extending interest-free loans to cash-strapped individuals is a matter of great charity since this relieves them of their immediate pressing needs. However, when we give or take credit, it is preferable to set it down in writing so that no confusion may arise and disagreements may not spoil friendly relations. This chapter begins with an explanation on the documentation and witnesses for loan agreements as prescribed in the Islamic texts. Further, it elaborates certain essential aspects of granting and receiving loans. The essential aspects such as the excellent merits of granting loans, the etiquette of recovering a loan, repayment, generosity to a penniless person, and the returning of loans in a better way, are also discussed in this chapter. In closing, the essential Islamic juristic conditions for contracting a loan are elucidated in a very crystal-clear way.
