Loan (Qard) — practice questions

Correct answer: C. Clauses 2, 3/4 and 3/4/1: Qard is the transfer of ownership of fungible wealth to a person who is bound to return wealth similar to it. Its subject-matter must be known, fungible (Mithli) and marketable, and the borrower comes to own it through possession, becoming liable to repay a similar amount, ordinarily at the place where it was delivered (Clause 3/4/2). A loan is not a trust or a lease of usufruct, and ownership passes on possession rather than on contract.

Correct answer: A. Clauses 4/1 and 4/2: Stipulating any excess for the lender is prohibited and is Riba, whether the excess is in quality or quantity, a tangible thing or a benefit, stipulated at the time of contract or when fixing or during a period of delay, and whether written or established by custom. It is, however, permissible to stipulate that the Qard be repaid at a place other than where it was made.

Correct answer: D. Clauses 5/1 and 5/2: An excess in quantity or quality, or a gift or benefit, given at the time of repayment is permissible when it is neither stipulated nor part of custom, whether the Qard is in cash or kind. By contrast, the borrower may not give the lender property or benefits during the period of the Qard for the sake of the loan, unless such giving was an established practice between them before the Qard.