Sample Qard Agreement

12. April 2021    

Qardh al-hasan (Arabic: „, transl. The loan is a form of interest-free loans (negotiable and tradable assets) that are extended by a lender on the basis of benevolence (ihsan) to a borrower. Al-Qardh is, from the point of view of sharia-man, a non-common contract, because it is an organization that is granted only in favor of tabarru` (donation). This is why al-Qardh al-hasan is a free credit granted to people in need for a fixed period. At the end of this period, the face value of the loan (asl al-qardh) must be quantified. In other words, shari`a prohibited the determination of a deductible for the lender, since it is Riba, whether the surplus is expressed in quality or quantity or if it is a material element or benefit. However, it is permissible for the repayment of qardh (removal of the loan) to be made with a surplus (material elements, benefit, benefit, etc.) provided that such a surplus is not expressly defined in the loan agreement or agreed in advance (by collusion or tawatu).) If you anlie to Allah, a beautiful loan [tuqridu llaha qard hasan], He will double to your (credit), and He will grant you forgiveness.. (Qur`an 64 (al-Tagabun): 16-17.) [5] Qardh also appears in many hadiths. Unlike the Koran, none of the hadiths in the collections of Bukhari, Muslim, Abu Dawud, Nasa`i, Ibn Majah, Tirmidhi, Muwatta, Musnad Ahmad or Darimi contains the expression qardh al-hasan. All use qardh without qualifiers.

[6] The qard contract is a loan contract. It is not a sales contract or a lease agreement, but a contract by which a party transfers ownership of a given asset to a counterparty. The counterparty may use the asset, but must return the asset after a specified period of time. The consideration may return an asset similar to that borrowed in quality and quantity, provided the lender accepts the agreement.1 A different and unorthodox interpretation of the verses of the Quran on qardh al-hasan (by M.O Farooq) is that the context of the verses „does not appear to have any relation to qardh in general as commercial transactions in the world“ , but rather includes „the symbolic transaction between Allah and the faithful.“ In such transactions, believers can only give Allah loans, not gifts, because „what we offer to Allah is … Treated as a loan“ since it is always rendered, „doubled or even more“. [11] Contrary to Orthodox religious doctrines that Qur`anic verses prohibit Muslims from charging interest on commercial loans, Farooq notes that the verses „do not give details of conditions or restrictions, including whether qardh or qardh al-hasan must be without excess. On the contrary, qardh al-hasan, as a contract with God, always indicates an excess“[5] (as the Quran speaks of the doubling of qardh hasan). The word qardh appears in the Quran in six verses: Q2:245, Q5:12, Q57:11, Q57:18, Q64:17, Q73:20. In each verse, it is used as part of the sentence qardh al-hasan, and always in reference to a loan to Allah and not to other people.

[4] Borrowers can use collateral to repay a loan.