Document background
The Interest Free Loan Agreement is a essential legal document used in the United Arab Emirates for documenting financial arrangements where one party (the lender) provides a loan to another party (the borrower) without charging interest, in compliance with Sharia principles and UAE law. This document is particularly relevant in Islamic finance transactions, family lending, corporate interest-free financing, and other scenarios where traditional interest-bearing loans are not suitable or desired. The agreement incorporates all necessary elements required under UAE Federal Law No. 5 of 1985 (Civil Code) and ensures compliance with Islamic finance principles of Qard Hassan. It includes provisions for loan amount, disbursement conditions, repayment terms, events of default, and optional security arrangements, while maintaining its interest-free nature throughout the transaction.
