9. PERSONAL LOANS
PERSONAL LOANS (QARD)
(loan means repayable financial aid. It does not refer to lending a particular article (‘ayn) for someone to use and then return after use, which is termed an ‘ariyya)
Loaning (meaning to give something to the borrower on the basis that he will return its equal) is recommended.
A loan is affected through a spoken offer and acceptance, such as saying, “l Ioan you this,” or, “I advance you it.”
It is permissible to give as a personal loan any article that may be bought in advance (b, d, e, f, g)) and nothing else (though this restriction does not apply to lending for use (‘ariyya).
It is not permissible for the lender to impose as a condition that the loan be repaid on a certain date (though for the Maliki school, to stipulate that repayment is obligatory on a certain date is valid and legally binding).
It is not permissible for the lender to impose some condition that will enable him to benefit from the loan, such as a condition that the borrower must return superior to what was loaned, or such as saying, “on condition that you sell me your horse for such and such an amount,” for these are usurious gain (riba). But it is permissible for the borrower to return superior to what was loaned without this having been stipulated.
It is permissible for the loan agreement to include the condition of collateral (meaning for the recipient to give the lender something as collateral for what he borrows) or the condition of a guarantor (such that the recipient brings someone to guarantee that the loan will be repaid).
The recipient of a loan is obliged to repay the equal of what was lent, though it is permissible for the lender to accept something other than the (type of) thing loaned. If the lender gives the recipient a loan and later meets him in another town and asks for it back, the recipient must repay it if it was gold or silver and the like, though if the loaned commodity was something troublesome to carry, such as wheat or barley, then the recipient· is not obliged to pay it back (in kind) but is merely obliged to pay back its value.
(Source: The reliance of the traveller, revised edition, Edited and Translated by Nuh Ha Mim Keller)
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