Islamic Finance Law from A-Z

Benefits given by a person to another without getting anything in exchange. For example, gracious repayment of debt, absolutely at the lender’s own discretion and without any prior condition or inducement for reward is covered under Tabarr’u. Repaying a loan in excess of the principal and without a precondition is commendable and compatible with the Sunnah of the holy Prophet (pbuh). But it is matter of individual discretion and cannot be adopted as a system, because this would mean that a loan would necessarily yield a profit, making it usurious.