Qard Hasan literally means "beautiful loan" or "benevolent loan." It is the purest form of lending in Islam — money given to someone in need with the expectation that only the exact principal amount will be returned. No interest, no profit, no markup.
For example, if a friend borrows $1,000 from you as Qard Hasan, they only need to return $1,000. You cannot charge even a penny more. The lender's reward comes from spiritual merit, not financial gain.
Some Islamic banks offer Qard Hasan for emergency needs, student loans, and microfinance. It is also used in Islamic banking structures — for instance, current accounts are often based on Qard Hasan, where the bank "borrows" your deposit and guarantees full repayment.