Islam asks Muslims to be faithful and loyal to their contracts. Debts should be paid on time. If a borrower desires to give a gift to the lender out of his free choice—and it is not the usual and customary practice in that community nor mentioned as a condition in the contract—he is allowed to do so.
Dr. Monzer Kahf, a prominent economist and counselor, states: “A gift by the borrower to the lender at the time of repayment of a loan is permissible, provided it is not usual and customary practice in that community nor, of course, mentioned as a condition in the contract.
“In fact, the Prophet (peace and blessings be upon him) recommended that a poor person should give a little more at the time of repayment, and he himself (peace and blessings be upon him) did the same. This is certainly not riba.”