The Beloved Rasool صَلَّى اللهُ تَعَالٰى عَلَيْهِ وَاٰلِهٖ وَسَلَّم has said: Before you, there was a person amongst people to whom the angel came to seize his soul. So, he was asked: Have you performed any virtuous deed? He said: I do not know. He was asked: Try to ponder. He said: I do not know anything except I used to trade with people in the world and demand from them, so I would give extra time to the rich and forgive the poor. Thus, Allah عَزَّوَجَلَّ made him enter Paradise. (Sahih Bukhari, vol. 2, pp. 460, Hadees 3451)
Dear Islamic brothers! Always treat the borrower with gentleness and kindness. Islam does not only persuade us to give loan to the needy and to pay it off in the best of the manners, but treating poor borrowers with affection, kindness and gentleness is also among the bright teachings of Islam. The basic aim of lending money is to eliminate the economic and domestic problems of a needy person. The loan that is given with this thought and good intentions will also become the source of reward.
Ways of becoming gentle with the borrower
Extremely easy and gentle conditions should be laid down. Laying down such strict conditions due to which the borrower finds himself in deep trouble may become the cause of ending mutual affection or love between them. If the borrower cannot make a lump sum payment, then divide the repayment into installments. It is very important to behave gently with the borrower when recovering the loan. Creating a scene and upbraiding unnecessarily in case the borrower delays paying off [his debt] will complicate the problem further instead of resolving it. If possible, forgive the whole debt or some of it. Alas! Nowadays, in our society, the concept of being gentle with the borrower is dying out, though it has many virtues.
Two sayings of the Beloved Mustafa صَلَّى اللهُ تَعَالٰى عَلَيْهِ وَاٰلِهٖ وَسَلَّم
1. The one who will bless a poor person [a borrower] with easiness, Allah عَزَّوَجَلَّ will bless him with easiness in the world and the Hereafter. (Sunan Ibn Majah, vol. 3, pp. 147, Hadees 2417)
2. The one who gives more time to a poor person or forgives his debt, Allah عَزَّوَجَلَّ will give him space under the shade of ‘Arsh on the day when there will be no other shade except the shade of ‘Arsh. (Sunan-ut-Tirmizi, vol. 3, pp. 52, Hadees 1310)
Examples of treating the borrower cruelly
Alas! In our society, there are a number of people who agree to give loan with the condition of receiving interest on it, but they do not want to give Qarz-e-Hasanah without any profit on it; whereas, interest-bearing trade is a cause of destruction in this world and the Hereafter.
Some people gain advantage from the helplessness of the borrower in such a way that they consider him to be their slave whom they have bought. This situation exists especially in the villages and rural areas more as the whole family of the borrower is considered to be the slaves. They are commonly blackmailed, frightened and threatened. Some people are found to hurt the feelings of the borrower in such a way that they do not hesitate even a little in insulting him if he delays paying off his debt. While asking for the rent of the house or shop, they gather neighbors deliberately by creating a scene and then in the presence of everyone, they insult and degrade the borrower and become indulged in committing the grave sin of hurting the feelings of a Muslim. Such people should also become gentle with the borrower and make it [the repayment of loan] easy for him.
If a borrower is rich and despite being capable of paying his debt does not pay it off, then the lender can demand strictly for the repayment of the loan money he has lent. Imam of Ahl-us-Sunnah, Imam Ahmad Raza Khan رَحْمَةُ اللهِ تَعَالٰی عَلَيْه has said: The one who can pay but evades without any reason is cruel, and reproaching and reproving him is permissible. (Fatawa Razawiyyah, vol. 23, pp. 286)
 Such loan which have leniency in time limit for paying it back and does not have an element of interest in it.