Permissibility of showing kindness to a non-Muslim and lending him money

Firstly:

Lending money and showing kindness in financial terms comes under the general heading of dealing justly and kindly that the Muslim is keen to attain in his interactions with Muslims and others, as Allah, may He be exalted, says (interpretation of the meaning):

“Allah does not forbid you to deal justly and kindly with those who fought not against you on account of religion nor drove you out of your homes. Verily, Allah loves those who deal with equity.

It is only as regards those who fought against you on account of religion, and have driven you out of your homes, and helped to drive you out, that Allah forbids you to befriend them. And whosoever will befriend them, then such are the Zâlimûn (wrong-doers those who disobey Allah)” [al-Mumtahanah 60:8-9].

Shaykh Ibn ‘Uthaymeen said:

With regard to the non-Muslim, there is nothing wrong with dealing with him in a just and kind manner, on condition that he is not one of those who fight against us an account of our religion or who drives us out of our homes, because Allah, may He be exalted, says (interpretation of the meaning):

“Allah does not forbid you to deal justly and kindly with those who fought not against you on account of religion nor drove you out of your homes. Verily, Allah loves those who deal with equity.  [al-Mumtahanah 60:8].

End quote from Tafseer Soorat al-Baqarah (2/294).

Allah, may He be exalted, has mentioned among the qualities of the righteous who are the people of Paradise that they (interpretation of the meaning) “give food, in spite of their love for it (or for the love of Him), to Miskin (the poor), the orphan, and the captive” [al-Anfaal 8:76], and the “captive” cannot be anyone but a non-Muslim.

See also the answer to question no. 129664 .

Secondly:

If a Muslim comes on the Day of Resurrection and he owed anything by a non-Muslim, Allah will settle the score between them in full, for the Day of Resurrection is the Day of due requital and justice. Allah, may He be exalted, says (interpretation of the meaning):

“And We shall set up balances of justice on the Day of Resurrection, then none will be dealt with unjustly in anything. And if there be the weight of a mustard seed, We will bring it. And Sufficient are We to take account” [al-Anbiya’ 21:47].

The Prophet (blessings and peace of Allah be upon him) explained that the settling of scores between those who are accountable will be done by taking some of the good deeds (hasanaat) of the one who did wrong (and adding them to the account of the one whom he wronged), and if he has no hasanaat to his credit, some of the bad deeds (sayyi’aat) of the one whom he wronged will be taken and added to his account, as is narrated in a saheeh report from Abu Hurayrah (may Allah be pleased with him), according to which the Messenger of Allah (blessings and peace of Allah be upon him) said: “Whoever wronged his brother with regard to his honour or anything else, let him seek his forgiveness today, before there comes a Day when there will be no dinar and no dirham, and if he has any righteous deeds to his credit, they will be taken from him, commensurate with the wrong that he did, and if he does not have any good deeds to his credit, some of the bad deeds of his companion will be taken and added to his burden.” Narrated by al-Bukhaari (2269).

As the disbeliever has no good deeds to his credit, some of the bad deeds of the one who was wronged will be taken from his account, commensurate with the wrong that was done to him, and will be added to the burden of the one who wronged him, then he will be thrown into Hell – we seek refuge with Allah.

If a Muslim loses money with him in this world, this comes under the heading of calamities that expiate sins, and if he bears it with patience, he will attain great reward for that.

And Allah knows best.