Lending money without interest is one of the greatest forms of charity, and is generosity of the highest order. It is greater to give one’s fellow a loan without interest than to give him a free handout. The needy person’s dignity is upheld when he accepts a loan because, in the long run, when he repays the loan, he will still feel able and self-sufficient.
When someone lends without charging interest, they demonstrate that they don’t think of themselves as the true owner of their money. Instead, they acknowledge God as the true Owner, and see themselves as just a steward over the money that God gives them. But when a person demands interest, it is as though they do not acknowledge that God is the true Owner of the money.
In all forms of charity, we must be sensitive in the way we treat others. The way you treat someone builds up trust within their heart. When it comes to lending money, it is inappropriate for the lender to embarrass, or feel greater than, the borrower. Why? Because it isn’t by the lender’s own power that he has had such good fortune, but rather it is only due to God’s good will.