Qard

Literally “to cut”. It is so called because the property is cut off – transferred to the borrower. Legally, Qard means to give anything having value in the ownership of the other by way of virtue so that the latter may avail himself of the same for his benefit with the condition that the same or similar amount of that thing will be paid back on demand or at the settled time. The repayment of loan is obligatory. Loans under Islamic law can be classified into Salaf and Qard, the former being a loan for a fixed time and the latter payable on demand. Qard is, in fact, a particular kind of Salaf (see Salaf).