Qarz-e-Hasna is essentially an interest-free loan. In Qarz-e-Hasna, the lender does not charge any interest on the principal amount borrowed. The primary motive behind offering a Qarz-e-Hasna loan is to help individuals in financial distress. It reflects a spirit of generosity and charity.
While the loan is interest-free, there may be terms and conditions associated with Qarz-e-Hasna loans, such as a repayment schedule, the purpose of the loan, and the borrower's ability to repay. However, these terms are typically more lenient than those of commercial loans.
Borrowers are encouraged to repay the borrowed amount once their financial situation improves. This repayment can be used to help others in need, continuing the cycle of charitable giving.