Book Of Loans And Lending.

Rule (787) In giving loans pronouncement of specified terms is not required. If one gives some property to another intending it to be a loan and the other party takes it with the same intention, the loan agreement is valid.

Rule (788) It is detestable to ask for a loan if he can do without it. If one receives a loan he must pay it back. Asking for a loan is better than asking for charity.

Rule (789) For the validity of loan it is necessary that the property given as loan must be a substance, thus, payable loan as a responsibility or the benefit in the form of increase in value of something, cannot constitute a valid loan contract. However, a loan contract having a substance of a general nature, confined in limited individuals as its subject is valid, like the case of lending one of the two Dirhams in one's possession.

Rule (790) It is necessary for the validity of a loan contract that the property lent could lawfully be owned, thus, lending wines and pigs is not valid. It is not necessary to specify the quantity, quality and details which makes the values of properties different from each other, regardless, the property is exchanged in kind or value. However, it is necessary that the recipient of loan know the amount and qualities of the property loaned to him; a prelude to paying back which is totally unrelated to the validity of the loan contract.

Rule (79I) It is necessary that the recipient takes charge and possession of the loaned property, because he cannot own it before taking charge and possession of the same.

Rule (792) If the property loaned is of the category, which is exchanged in kind like gold or silver, wheat and barley etc. The recipient becomes responsible for the same kind and he has to pay in kind, regardless, the price is the same as that at time of receiving the loan or it is less or more at the time of payment. The lender cannot ask him to pay in value. However, it is lawful to do so with both parties' consent and the payable price is the market price of the time of payment. If the property loaned is exchanged on value basis, the value of the time of receiving the loan is payable.

Rule (793) If one lends as loan a substance, and the recipient accepts, and the lender demands the same substance loaned, it is not necessary to return the substance.

Rule (794) A loan which is due for pay-back cannot be delayed unless a condition in a binding contract requires it, however, it is valid to pay a loan before the due date with some reduction but to delay a duly payable loan for the capital and plus something is not valid.

Rule (795) The lender must not refuse to accept payment any time if the loan is already payable. The same rule applies when it becomes due. Before the time payment is due, can the lender refuse accepting a payment which is not yet due; there are two views about it, apparently, he must not refuse, except, if it is known from other sources that the lender has the right to delay payment.

Rule (796) It is not lawful to set a condition in the loan contract, which requires the borrower to pay extra in quantity or quality, but, apparently, the contract still stands valid, only the condition is void and getting extra is unlawful. If one borrows some wheat by means of a contract wherein Riba is involved and he uses it as seed to plant more wheat, he can lawfully use the harvested product. The same rule applies if one gets some property by means of contract wherein Riba is involved and then with such property he buys clothes. However, if one buys some thing with the very substance of the extra amount received, it is not, in this case, lawful to use it.

Rule (797) It makes no difference in the unlawfulness of a condition requiring extra, that the extra amount would go to the lender or some one else, like if a lender says, "I lend you this $100 if you give ten dollars to 'A' or spend it for such and such cause, such condition is not valid. The same rule applies, if the condition requires to build a mosque or a certain other project where some extra property is involved. It is lawful to accept a loan free of all conditions, and it is also lawful to set conditions that require the recipient to be up to his liabilities in the form of payable property like to say, I lend you 'X' amount of money if you pay Zakat due on you or you debts. The same rule applies if the condition requires what is not a property like saying, "I lend 'X' amount of money if you pray for me or Mr. 'A' or yourself pray or fast," regardless, the benefit is in favor of the lender, the recipient or a third party. The fact is that when a condition requires some extra property, which is not independent of the loan, such condition is not lawful, other than this is lawful. If a condition requires payment at a specified place it is binding and so is security deposit. If in a binding contract a condition requires delayed payment it is valid and the time limit is binding, apparently, it is lawful to set a time limit in the loan contract, the lender thereafter cannot demand payment before such time.

Rule (798) If one lends another person some thing with a condition that the latter sells some of it for less than its actual price or rent it to him for less than its actual rent, this falls under the extra requiring condition which is not lawful. If the recipient sells to lender some thing for less than its actual price or buys from him for more than its actual price, with a condition that he lends him some money, it is lawful and it does not fall under unlawfully extra paying loans.

Rule (799) It is lawful for the lender to set a condition requiring the recipient to pay back, what is lent although being exchanged in kind, in another kind, like paying in Dinars for Dirhams, or vice verse. Such condition becomes binding, if the properties are of equal value or what is paid is of less value than what was loaned to him.

Rule (800) A condition set by lender requiring extra payment from recipient is not lawful, but if it is in favor of the latter it is not an

offense, like lending the 'X' Dollars to be paid back 'X' minus 'Y' dollars; similarly if recipient sets a condition requiring the lender to pay the former something.

Rule (801) It is obligatory for the borrower to pay back immediately as soon as it is due upon the lenders demand, if possible even by selling his goods or property, or demanding people owing to him or borrow from someone if it does not cause hardship to him, or rent his property. But if he is not able to do any of these, is it obligatory for him to do some business suitable to his status to earn and pay his debts or not? precautionary he should do so. However, there are some exceptions; selling one's house where he lives, his clothes that he uses, even for beautification, reducing his employees whose services he needs etc., based on his social and economic status, that if he loses certain means and facilities he is faced with a lot of hardships, degradation and rancor. It does not make a difference whether one piece is treated as an exception or more, one may need more than one house, or more than one employee because of his social and economic standing and status, and the same rule applies to other things treated as exceptional. But if one does not need some of his houses or things of his belonging, it is necessary to sell them. In matters of the exceptions, the properties like one's house etc., one is not forced to sell them to pay his debts and it is not obligatory for him to do so, but if he agrees to sell his house to pay his debts it is lawful for the lender to accept such payment even though the lender should not have agreed to the sale of the house of the indebted.

Rule (802) If a house is a property of endowment and Mr. 'A' is the beneficiary of that endowment and besides this he has his own house if his living in the endowment property is not against his socio-economic status and living therein does not harm his condition and status, he according to a precautionary rule, in fact, a more clear reason, should sell his own house to pay his debts.

Rule (803) If one has some property, besides those exceptional ones but he can only sell them for less than fair market value, it is necessary to sell them for less to pay the loan. However, if the difference of price is to the extent that commonly is not negligible and the person is not considered affluent in this case, it is not necessary to sell them to pay the loan.

Rule (804) It is lawful to donate for paying some one's debts, regardless, the indebted person is dead or living, and this frees him of his liability, and regardless, it is with the approval of the lender or not, even if he disagrees.

Rule (805) If the person indebted sets aside an amount to pay off the debt, it is of no effect, only when the lender receives the payment, then the amount is specified. If the amount to be paid is lost before reaching the lender, the recipient is still liable for it.

Rule (806) When the recipient of loan (the borrower) dies, payment becomes due and it is paid from the legacy before any thing else. If the lender dies the payment time remains as it is according to the contract. His heirs cannot demand immediate payment before due time. Thus, if a husband dies, the wife can demand her dowry - Mahr which is not payable at that time; on the contrary, if the wife dies her relatives cannot demand her dowry for which payment time is not yet due. Can divorce be treated as death in this regard? There are two views about it, apparently, the same rule can be applied to it, because of the fact that the condition of delaying the payment is valid only when it is lawful with marriage still effective.

Rule (807) The death of the indebted is different from his being stopped by a court order from using his property, like bankruptcy, if the latter has debts payable presently or later on, his property is divided among the lenders who must receive payment immediately but not those whose loans are not due for payment yet.

Rule (808) If the lender disappears and there is no news from him, the borrower must, with the intention of remedy, make a will to pay the loan after he dies. If his disappearance is such that can only happen with the death of a person, it is necessary to pay the loan to the lender's heirs. It also is lawful to pay the loan to the heirs of the lender after ten years if there still is no news from him, even if it is not due to his death; in fact, it is lawful to pay to his heirs after four years from his disappearance if one has kept searching for him during this time.

Rule (809) It is not lawful to divide a receivable loan. Thus, if two people are to receive payment from several people, like if they sell a property commonly owned by the two to several people, or receive in inheritance a payable loan owned by several people, and then divide such receivable loans after adjustments and assign one to collect the loan from one of the indebted people what he has to pay for his share and what is owed by the rest of people would be collected by the other one, such arrangement is not valid. The loan remains as commonly owned by them both. However, if two people have a collectable loan owed by one person, they can decide to let one of them collect his share from the indebted and leave the rest for the other and this does not fall under the case of dividing the commonly owned loans.

Rule (810) It is not lawful to demand payment from an indebted that is not able to pay because of his facing financial hardships, he must wait until he can pay.

Rule (811) If one borrows some Dinars and then the government cancels them and replaces them by other Dinars, he only has to pay the former Dinars. However, if one borrows currency notes, which are then cancelled, the borrower has still to pay the value of such currency marketed before cancellation.

Rule (812) It is valid to sell a loan in exchange for a property at hand even if the property is less than the loan in value, if it is not of the same kind and not something that involves RIB~ It is not valid to sell a loan in exchange, for loan that existed before contract, regardless, both loans are due for payment, payable later or of different times to pay. If it becomes loan by that contract, such loan is not valid if both are payable later on, according to a precautionary rule, and it is valid in other cases. If one of them is loan before the contract and the other after the contract, it is valid except in the sale of (muslam Fih ), goods purchased in exchange for cash to be delivered later on, for which the time of delivery is not yet due, in which case it is not lawful to sell it to other than its seller in all cases, but it is lawful to sell to other than its seller after it is due for delivery, and to its seller after such time in all cases according to the details just mentioned.

Rule (813) It is lawful for a Muslim to receive payment of loan from a non-Muslim tax-payer in the form of the proceeds of something that the latter has sold and which cannot lawfully be bought or sold and if he becomes a Muslim after such sale, he still deserves to demand payment for such merchandise.

Rule (814) It is lawful for 'A' to give some property to 'B' so that 'B' authorize 'A' to collect the same amount from 'B's friend 'C' at another place if 'C' owes something to 'B' and the property is not of the kind that is bought and sold by weighing and measuring. 'C' pays the same amount or less or more.

Rule (815) If one receives money from a deal in which RIBA is involved and he is ignorant of the rule or the deal being involved in RIBA and then learns about it; if he repents, what he has received is his, but he must not do it again.

Rule (816) If one receives in inheritance some property in which there is some RIBA, if it is mixed with lawfully owned property there is nothing against it, if such property is known and specified and its owner also is known, it must be given back to him, if the owner is not known, one has to deal with it as if it were a property of unknown owner.

Some Final Words

Giving loan to believers is strongly recommended and preferable act, especially to the needy ones, because it provides relief to ease their difficulties. The Holy Prophet has said, Any one who provides relief and ease to a Muslim's worldly hardships, Allah grants him relief to ease his hardships in the Hereafter". He has also said, "If one gives loan to a believer to provide him some relief, his rewards are like the rewards of paying Zakat and the angels pray for him to the time of payment. One who gives loan to his Muslim brothers, for each Dirham his reward will weigh equal to the mountain of Uhud of the Rizwa Mts. and Mts. Sinai, if he deals with kindness when demanding payment, he will pass the Bridge to paradise just like lightning, without any questions asked or any suffering. If one's Muslim brother requests for a loan and it is denied, Allah makes his going to paradise unlawful when people of good deeds will be receiving their rewards. The sixth Imam has said, Any one of