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| | The laws of interest are one of the most complex and relevant laws in today's economy and even in everyday life. See the numerous pages below for the details of arranging loans in a permitted fashion. |
| * [[Categories of Ribbit]] | | * [[Categories of Ribbit]] |
| * [[Interest with Non-Jews]] | | * [[Interest with Non-Jews]] |
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| * [[Common Everyday Cases of Interest]] | | * [[Common Everyday Cases of Interest]] |
| * [[Heter Iska]] | | * [[Heter Iska]] |
| Lending money on interest is one of the more severe prohibitions in the torah. <ref> The Gemara BM 71a says that one who lends with interest becomes poor and never recovers. The Rambam Hilchot Malveh Viloveh 4:2 delineates six biblical prohibitions which could potentially be violated in any particular loan transaction. Ramban Sefer Hamitzvot Shoresh 6 adds a 7th. </ref> The lender, the borrower, the guarantor, the witnesses, and even the scribe violate when engaging in an interest-bearing loan. <ref> Mishna Bava Metzia 75b. Shulchan Aruch YD 160:1</ref>
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| ==Basics==
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| # In any case where a person owes a debt to another Jew whether it is because he borrowed money or because he hired him and owes him or because he rented something and didn’t pay yet, it is forbidden to pay more than the actual debt because of the prohibition of taking interest. <Ref>S”A Y”D 176:6, Rama Y”D 161:1, The gemara Bava Metsia 63b explains that as long as one is paying extra to be able to hold the money for longer, it would be a violation of this prohibition. </ref>
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| # It is prohibited to lend with interest even if the borrower is wealthy and willingly agrees to pay the interest. <ref> Shulchan Aruch YD 160:1,4. </ref> It is prohibited even in cases where it seems entirely fair such as reimbursing the lender for the interest he was earning while his money was in a non-Jewish bank. <ref> Iggerot Moshe YD 3:93 </ref>
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| # If neighbors have a good relationship and commonly borrow without being careful to return everything they borrow, then there is no prohibition of interest as the neighbors aren’t borrowing but rather gifting one another. <Ref> The Weekly Halachah Discussion (vol 2, pg 348) quoting The Laws of Interest (pg 35)</ref>However, if neighbors do not such a relationship then a neighbor who borrows a half a bag of sugar is borrowed only that amount may be returned unless the amount difference is insignificant (about which people don’t care) <Ref> The Weekly Halachah Discussion (vol 2, pg 348) quoting Brit Yehuda (Siman 17 note 6)</ref> or if one is unsure how much one borrowed one may return an amount to be sure the loan is repaid. <Ref> The Weekly Halachah Discussion (vol 2, pg 348) quoting Sh”t Minchat Yitzchak 9:88</ref>
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| # It is permitted for someone to borrow another Jew's credit card to pay for a purchase and repay them the amount spent. Even if the purchaser receives points from the credit card company, that isn't considered interest since it doesn't come from the borrower. Additionally, the borrower may not the purchaser for any interest fees that the purchaser may incur if he pays late.<ref>[http://www.torah.org/advanced/weekly-halacha/5762/behar.html Rabbi Doniel Neustadt on torah.org] and [dinonline.org http://www.dinonline.org/2014/01/17/receiving-points-from-credit-card-loan/]</ref>
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| #Some explain that a key factor in determining if something is considered a loan is whether the item is fungible and normally traded; if it is always traded to be kept that is a sale. Another factor that is used is whether the type of item being lent is similar to the item that is being returned; if they’re dissimilar it is like a sale.<ref>Biurim in Chelkat Binyamin 161:1 s.v. dvar wrote that there’s a dispute between the Chavot Daat 161:1 and Mekor Mayim Chayim 161:1 why a loan of slaves isn’t loan but a sale. Chavot Daat explains that since each slave is unique and needs a significant evaluation it is considered a sale when you trade one for two later. His premise is that there’s no prohibition of a loan of one item for another like apples for oranges. However, the Mekor Mayim Chaim explains that since a person doesn’t give a slave to be loaned out or traded (lhotzah) but rather to be used it isn’t considered or termed a loan but a sale.</ref>
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| #There is no prohibition of ribbit upon the borrower whenever it is rabbinic ribbit.<ref>Nemukei Yosef b”m 39b s.v. garsinan, Ritva there, Darkei Moshe 160:2, Rama 160:1</ref>
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| ===Rentals===
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| #It is forbidden to charge interest for a rental.<ref>Teshuvot Maimoniyot 15 records the opinion of Rabbi Eliezer Mtuch that interest is permitted for a rental. His proof is Macot 3a. However, the Bet Yosef 160:21 disagrees with this opinion.</ref>
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| ===Worker's Salary===
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| #It is forbidden to charge interest for wages of a worker.<ref>Gemara Bava Metsia 73a clarifies that there is interest for hiring a worker. Bet Yosef 160:21 clearly states this as well.</ref>
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| ===Lending an Object===
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| # It is permitted to lend an object such as a tool to one's friend even on condition that if it breaks he will get you a new one even though it is more expensive than the one you lent him.<Ref>Mishnat Ribbit 4:35 based on Chavot Daat 161:1</ref>
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| ==Rabbinic Prohibition of Interest==
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| # There are several different forms of interest that are prohibited only rabbinically. There are several practical differences if it is only rabbinic. For example, Rabbinic interest was not extended to charities. <ref> Shulchan Aruch and Rama YD 160:18 </ref> Additionally, one who receives biblical interest must return it but this does not apply to certain cases of rabbinic interest. <ref> Shulchan Aruch YD 161:2 </ref>
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| # It is permitted for the yeshiva to give out student loans for tuition with interest since it is only a rabbinic form of interest in that the money was never given to the students to spend and a yeshiva is allowed to taking rabbinic forms of interest.<ref>[https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis min 35-40)] explained that it is permitted for a yeshiva to lend money on interest for student tuition loans since the money isn't given to the students as a loan and then repaid, it is used to pay off the debt for classes and services provided. Postponing paying for a service isn't derech halvah, the nature of borrowing, and therefore only a rabbinic form of interest, which is permitted for a yeshiva.</ref>
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| ==Returning Interest==
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| ===Biblical Interest===
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| #A person who took interest that was in violation of Biblical ribbit must return the ribbit and if he doesn't the courts can extract it. Nonetheless the courts can force a person to fulfill his mitzvah to return the interest.<ref>Shulchan Aruch 161:5</ref> He must pay with cash and not items worth cash.<ref>Chelkat Binyamin (Biurim 161 s.v. ratza), Netivot Shalom 161:8:5</ref>
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| # Children of the lender who collected interest don't need to return it unless their father did teshuva before he passed away and didn't get to return it and in such a case they should return any unique item that their father collected as interest.<ref>Shulchan Aruch 161:6</ref>
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| # If a lender wants to do teshuva the lender should return the interest but the borrower shouldn't accept the interest in order not to prevent the lender from doing teshuva. That is only true if the majority of the lender's business and wealth is due to interest.<ref>Shulchan Aruch 161:7</ref>
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| # A transaction about which there is a dispute if it is Biblical interest or rabbinic interest if the lender collected it he doesn't need to return it and if the borrower grabbed it back he doesn't need to return it.<ref>Shach 161:4. See Avnei Nezer YD Brit Avraham who questions it.</ref>
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| ===Rabbinic Interest===
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| #A person who took rabbinic interest is obligated to return it but the courts can't force him to do so.<ref>Shulchan Aruch Y.D. 161:2</ref>
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| #A borrower who paid rabbinic interest can't force the lender to return it and if he grabs it out of the hands or domain of the lender he must return it.<ref>Shulchan Aruch 161:3</ref>
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| # A borrower who paid the rabbinic interest because a errant judge ruled he should do so is entitled to that money from the lender.<ref>Shulchan Aruch 161:4</ref>
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| # A lender who collected interest from lending a commodity and getting that same type of item in return (''Seah Bseah'') violated rabbinic interest and should return it but the courts can't extract it from him.<ref>Shulchan Aruch 161:1</ref>
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| #A person who took gifts to give a loan before the loan or a gift after the loan was repaid doesn't need to return it.<ref>Based on the Rashba's teshuva, Rama 161:2 writes that ribbit before and after the loan isn't as serious as other cases of rabbinic interest and doesn't need to be returned. The Gra 161:8 explains that the reason that ribbit that is before or after the loan doesn't need to be returned is because it is was given as a gift. Chelkat Binyamin 161:18 agrees.</ref>
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| ===Returning Items===
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| # If was given a bunch of objects at a discount for the interest payment he must return all of the items he collected as interest or he needs to pay the fair price of the objects he collected. For example, if the borrower owed a dollar of interest and he gave the lender five pounds of wheat when the fair price was four pounds for a dollar, the lender must repay the borrower either all of the five pounds of wheat or the fair price of the five pounds of wheat which is a dollar and a quarter.<ref>Rava in Gemara Bava Metsia 65a, Shulchan Aruch Y.D. 161:8. The Netivot Shalom 161:8:1 writes based on the Ramban that the reason for Rava is that since the fifth pound of wheat was acquired as a result and a benefit of the interest payment it is included in the interest and must be returned.
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| * The reason that the lender has the right to return the wheat thereby invalidating the sale is because he can claim that had he known that he wouldn't have been able to keep the interest he never would have paid a dollar and a quarter for the five pounds of wheat. This is the reason of the Mishna Lmelech (Malveh Vloveh 8:15 s.v. vda) cited by Chelkat Binyamin 161:67. However, Chelkat Binyamin in fact points out that the Nemukei Yosef b"m 39a clearly holds otherwise. The sale is valid automatically and the lender can only invalidate the sale if both the borrower and lender agree. The Netivot Shalom 161:8 5 makes the same point and in fact argues that the Shulchan Aruch also means this in line with the Nemukei Yosef (also considering that the Bet Yosef cited the Nemukei Yosef without any argument or disagreement).</ref>
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| # If a borrower gave a unique item for interest the lender must return it.<ref>Shulchan Aruch 161:9</ref>
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| # If the borrower stipulated to give a certain amount of interest and then gives an extra gift as well at the time of the payment that gift is considered rabbinic interest and the bet din can't force its return. Nonetheless, the lender has an obligation to pay it.<ref>Netivot Shalom 161:8:2 writes that since there's no connection between the interest and the gift and so the gift is only rabbinic interest and it isn't similar to Rava in Bava Metsia 65a.</ref>
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| # If a person stipulated to give an item as interest that item must be returned and not its value.<ref>Pitchei Teshuva 161:9 citing the Mishna Lmelech (Malveh Vloveh 8:15)</ref>
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| ===Deducting the Unpaid Interest===
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| # If the loan wasn't yet paid up and the borrower paid the lender rabbinic interest, some say that the amount of the rabbinic interest that was already paid is deducted from the capital and the difference is paid. However, others hold that the entire capital must be paid. The first opinion is the one accepted as the halacha.<ref>Shulchan Aruch and Rama 166:3. Rif holds that if someone owes rabbinic interest it isn't deducted from the capital because doing so is like removing the lender from what he is entitled to and bet din doesn't force returning rabbinic interest. However, the Rosh cites Rabbenu Efraim who holds that unless deducting the interest will cause the borrower to have to leave a field left to him as a collateral, generally the rabbinic interest is deducted. Shulchan Aruch 166:2 cites both opinions and the Rama follows the Rabbenu Efraim. </ref>
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| ===Rental===
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| # If a person rented a house or any other item of the borrower for cheaper he needs to return the difference between the discounted price and the full value because that discount was Biblical interest that he collected.<ref>Shulchan Aruch 161:5</ref>
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| # If a person rented a house or another item of the borrower and overpaid, but the amount that he paid was all money that he gained from stipulated interest, he must return the full amount that was stipulated.<ref>Shulchan Aurch 161:10</ref>
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| ===Document with Interest===
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| # If a person has a loan document stating that a person owes capital and interest the document should be ripped up.<ref>Rama 161:11</ref>
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| # A loan document with interest can be used to collect the capital and not the interest.<ref>Shulchan Aruch 161:11</ref>
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| # If the document included the capital and the interest and didn't specify what part of the obligation was capital and what was interest he can't use that document to collect anything.<ref>Shulchan Aruch 161:11</ref>
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| ===Converting an Interest Loan into a Heter Iska===
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| # Some hold that it is evading ribbit and forbidden to convert an interest loan into a heter iska.<ref>Yabia Omer YD 1:13 forbids this because of haramat ribbit unlike the Rav Poalim YD 4:11 who allows converting a loan with interest into a loan with a penalty if not returned by the delivery date. Yabia Omer argues that doing such a conversion is haaramat ribbit. Radvaz 3:511 writes that haaramat ribbit depends on the time and place and in a generation that isn't careful in this area more cases are forbidden.</ref>
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| ==Discounts==
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| # Usually it is considered a rabbinic prohibition of taking interest to have a two tiered system in which the buyer could either pay a lower price now and receive the merchandise or can get the merchandise now and only pay later but at a higher price. <ref>Shulchan Aruch YD 173:7, The Laws of Ribbis p. 132, [https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis min 40)]</ref>
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| # It is common in some businesses to require a deposit when a customer places a sale to ensure that the seller follows through with the sale. It is permitted for the seller to charge a lower price to the buyer who makes a deposit since the seller’s intent in requiring a deposit isn’t to charge interest but to ensure that the sale takes place. <ref>The Laws of Ribbis p. 133</ref>
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| # It is forbidden to pay a camp an early bird special or discounted price if you pay early.<ref>[https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis approx min 40)]</ref>
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| # It is forbidden to pay for a sefer in advance before the printer published the sefer.<ref>[https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis approx min 40)]</ref>
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| # Using advanced discounted payments for a yeshiva or non-profit tzedaka organization is permitted since this is only a rabbinic form of interest.<ref>[https://www.yutorah.org/sidebar/lecture.cfm/900500/rabbi-hershel-schachter/dinei-ribbis/ Rav Hershel Schachter (Dinei Ribbis approx min 40)]</ref>
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| ===Buying on Credit when the Price is Unclear===
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| '''''Tarsha'''''
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| # If there is no fixed price in the market for an item it is permitted to pay for it in advance and have it delivered later.<ref>Gemara Bava Metsia 65a, Shulchan Aruch 173:1</ref>
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| # It is forbidden for the perspective lender to counter the request of a loan with a subterfuge of having the lender borrow a commodity to then resell it to the lender for a cheaper price. Since the borrower originally requested a loan the borrower may not sell the commodity for a cheaper price when when the price is unclear in the marketplace.<ref>Taz 163:6</ref>
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| # If the buyer's intention is purely to buy the item on credit in order to sell it immediately for a cheaper value that is considered a prohibited since it as though the cheaper price is stipulated as the value of the loan and yet he agreed to repay a higher amount.<ref>The Ritva 65a cited by Bedek Habayit 173 writes that if someone purchases a commodity on credit it is permitted if the price isn't clear. However, if the buyer immediately sells it for less it shows that the loan obligated him to pay more than the value of the item and is interest. Chatom Sofer YD 137 follows the Ritva and writes that one can't bring a proof from Shulchan Aruch 163:3 or Taz 163:6 who imply otherwise since they didn't have the Ritva.</ref>
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| This section isn't finished.
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| #Downpayments and early bird specials. 63b rav nachman says you can’t do an early bird special unless it is yesh lo. 65a he says you can do a downpayment and get the item now and pay more later as long as you don’t specify the price and tosfot 65b and 63b adds that if its price is evident in the market it is forbidden.
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| Rama 173:7 says you can do poskin on parah or talit even ein lo. That’s based on tosfot 63b that says if there’s no shuma then we’re not calling it agar natar we’re calling it tarsha. But what about the fact it might go up on its own like poskin al hapeirot?
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| Bear hagolah and tiferet lmoshe - peiro will have a shuma later but parah will never
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| Shach - parah is yatzah shaar in that the factors necessary to determine its price like per pound is shaar kavuah
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| Taz argues on rama and says its only if it didn’t go up
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| Chavot daat 173:11 there’s no shiybud haguf here if you give them a specific item, but there is for the general fruit which you can give them any fruit
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| Rav chaim in gemara and tos not rama - with ashray bmata that’s partially yesh lo
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| ==Partnership of Jews and non-Jews==
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| # It is forbidden to charge or take interest from an individual Jew or group of Jews. Some poskim allow borrowing or lending on interest to a partnership of Jews and non-Jews if the non-Jews comprise at least half of the group to which one is lending or from which one is borrowing.<ref> The Shoel V’Nishal (Mahudra Kama 3:31) writes to Rav Shlomo Ganzfried, author of the Kitzur Shulchan Aruch, that he held that it was permitted to borrow or lend with interest from a partnership between Jews and non-Jews. He thought that since the partnership signs under the title of an entity and not individuals it is permitted according to Rashi and those who hold that lending on interest through a messenger is permitted. Further, even according to those who argue with Rashi, he thought that it was permitted if there are non-Jews in the group so that the Jews can say that they only profited from the non-Jewish borrowers and not the Jewish borrowers. Rav Yitzchak Schmelkes in Beis Yitzchak (v. 2 Kuntres Acharon no. 32) qualifies the Shoel V’nishal’s permit to cases where there are a majority or at least half non-Jews. Mishneh Halachot 6:145 and 13:130 permits borrowing or lending from banks that have a minority of Jewish shareholders because the Jewish shareholders don’t have a say in how the bank runs. The Maharam Shik YD 158 argues with the Shoel V’nishal’s logic; see there for his leniency with other conditions. </ref>
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| ==Corporations==
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| # Some poskim say that it is permitted to lend or borrow on interest from a corporation even if it is owned by Jews because halacha views the corporation as a dummy entity that isn’t Jewish. Others say that it is only permitted to lend on interest from the corporation but not borrow on interest from them, while others still forbid both borrowing and lending with interest from a Jewish corporation.<ref> Igrot Moshe YD 2:63 thought that the prohibition of borrowing with interest does not apply to a corporation. Since no one person has personal liability for the loan, the corporation may pay interest. He based this contention on the opinion of Rabbenu Tam (cited by Tosfot Ketubot 85b) who says that there are two types of indebtedness: a lien on one’s property and a personal one. Rabbenu Tam holds that if a person forgives the borrower and relinquishes the personal lien even if there still is a property lien that was sold to another person, that property lien automatically falls apart. Accordingly, one may receive interest from a bank or invest in bonds or stocks of a corporation, though one still would not be allowed to borrow from a corporation.<br />
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| Maharshag YD 3 brought a proof that there is no biblical ribbit to charge a corporation interest from the Gemara Gittin 30a that permits giving money in advance to a kohen so that the next time a person has a crop he can take off Trumah, sell it to kohanim, and then the proceeds are effectively given to the kohen and used to pay off part of the debt so that the owner can keep the proceeds of the sale. The gemara explains that even though there is a rabbinic prohibition of interest to pay in advance for food that hasn’t grown and there’s no market price, here it is permitted since the kohen borrower has no real obligation to pay out of pocket according to the original stipulations. The Chelkat Yakov YD 66 grapples with the Rogachover and Maharshag but ultimately says that it is forbidden rabbinically even though there is a good logic to permit it. Rav Zalman Nechemya Goldberg (Shiurei Ribbit p. 8) questioned the proof of the Maharshag because the risk factor that the debtors won’t pay the bank isn’t as great as the risk that a field gets ruined. Minchat Shlomo 1:28 argues with Rav Moshe and isn’t lenient in either direction.
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| Lastly, Rav J. David Bleich in Netivot HaHalacha v. 2 p. 191-4 disagrees with Rav Moshe that it is impossible to have a shiybud nechasim without shiybud haguf. If there exists a shiybud it also applies to the guf even though there is some external conditions which make it impossible to collect from the shiybud haguf.</ref>
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| ==Non-Financial Benefit==
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| # It’s forbidden for the borrower to do a favor to the lender if he would not have done it otherwise (if not for the loan). Even if the borrower would have done a certain favor if not for the loan, the borrower may not do that favor in public unless they have a good relationship and the borrower has done public favors for the lender in the past.<Ref>The Weekly Halachah Discussion (vol 2, pg 346) </ref>
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| # While some poskim prohibit the borrower from thanking the lender for the loan under the prohibition of ribbit devarim <Ref> Iggerot Moshe YD 1:80 </ref>, other poskim are lenient and allow a simple thank you. <ref> Rav Shlomo Zalman Auerbach in Minchat Shlomo 1:27 </ref>
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| # There’s no prohibition to do a non-financial favor after the loan was paid up. <Ref> Birkei Yosef Y”D 160:11, The Weekly Halachah Discussion (vol 2, pg 348), Malveh Hashem (vol 1, 8:30) </ref>
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| ==Heter Iska==
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| <p class="indent">Because of the difficulty of abiding by all the details of loaning without interest, there’s an institution which is a contract set up by the Rabbis to conduct a business loan without violating the Torah prohibition of interest. This is only a general overview and not a procedure to be done without consulting an Orthodox Rabbi.</p>
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| <p class="indent">The Heter Iska splits the money in two, half (or a percentage) is a money deposit and half is a loan. The borrower may use the half which is a money deposit for business but as the deposit is considered the property of its owner wherever it may be, the profit that the borrower makes belongs to the lender. However, a loan is considered the money of the borrower and the profits belong to the borrower, who is then only obligated to return the capital without interest. </p>
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| <p class="indent">One condition of the agreement is that the borrower isn’t trusted to say that he lost money unless he proves it with acceptable witnesses and he isn’t trusted to say that he didn’t profit unless he makes a Shevuah (biblical oath) that he didn’t profit. Another condition is that if the borrower pays the agreed amount (above the original capital) he doesn’t need to prove that he didn’t make any more money. Therefore, at the end of term, the receiver returns the half which is a loan (while keeping the profit made from that half) and returns the deposit along with the profit he made from that half up to the amount agreed upon (and if he didn’t profit that amount unless he proves it he must still pay the agreed upon amount, and if he profited more, he’s exempt from paying more). </p>
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| <p class="indent">There are many other conditions and one must consult with a reliable orthodox rabbi regarding each situation and how to draw up a Heter Iska. <ref> Kitzur Shulchan Aruch 66:1-6. See Ribit Halacha LeMaseh chapter 20. One can see this [http://www.bethdin.org/docs/PDF15-Shtar_Iska.pdf shtar isko] on the website of the Beth Din of America.
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| * Jewish Agent: According to Rashi (cited by Rama 160:16) that there’s no prohibition of ribbit when done through a shaliach perhaps that can permit using a bank loan since the teller is merely an agent of the bank. Bet Yosef 160:16 and Taz vehemently argue that this is completely forbidden and a ruse. Rather this citation of Rashi was made a mistaken student. Rama and Shach defend Rashi.
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| * Non-Jewish Agent: Rabbenu Tam (cited by Tosfot 71b s.v. kgon) held it was permitted to lend with interest to a Jew using a non-Jewish agent since there's no concept of agency between a Jew and a non-Jew. Therefore, even though one Jew asked another Jew to get a loan with interest from another Jew it is permitted since the non-Jew is acting on his own. Most rishonim disagree with the Rabbenu Tam.
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| * Non-Jewish Agent with a Security Deposit: The Ri held that it was permitted to send a non-Jew with a security deposit to another Jew through a non-Jewish agent in order to borrow with interest. The non-Jew is considered to have acquired the deposit and so it is as though there's a separate loan between the borrower Jew and the non-Jew and another one with the non-Jew and the lender Jew.
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| * "Witness Clause Heter Iska": The Levush 167:1 writes extensively against the Heter Iska of his time that required bringing witnessed to testify that the investment didn't make the expected gain. He claims that it is a Biblical violation of Ribbit since it is known that with this condition one can specify not to trust any witnessed besides two witnesses on opposite sides of the world and make it impossible for the borrower to be exempt from having to pay the interest. Furthermore, the lender has no right to say that he is certain that the borrower made the gains they expected. Often he knows that it isn't the case and still he is collecting the interest. He distinguishes between ensuring you get back the capital with a clause of having to bring witnesses and that is based on the Trumat Hadeshen 302. However, he would not allow adding a condition to allowing the borrower to exempt himself from paying for the expected gain when he didn't gain money. Shach 167:1 and Taz 167:1 cite and agree with the Levush. Shach adds that one could ask the borrower for a vow that he in fact didn't gain money but he may not ask for witnesses. Taz adds that the witness clause for the capital has to be reasonable to allow for witnesses that could reasonably know about the state of the borrower's business. Lastly, both the Taz and Shach make it obvious that the measure that the Trumat Hadeshen allowed to ensure the return of the capital is only permitted when it is otherwise only a rabbinic interest such as an iska, half loan and half investment, but not for a case of pure loan.
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| * "Derisha's Heter Iska": Derisha 167:1 seems to allow setting up an iska half loan and half investment which evolves into a complete loan after the iska reaches a certain percent of gain. The lender needs to pay a small amount to the borrower in order to pay him for his work investing the half investment. Then the lender can buy the "call option" from the borrower that if the investment doesn't reach the percent gain specified then the borrower will pay the difference between the actual price of the investment and the specified price. They can adjust the price of this option to a small amount. However, the Taz 167:1 points out that this approach is complete incorrect and is a violation of Biblical interest. He brings many proofs including the Rosh responsa 88:2 who explicitly rejects this idea. The Shaarei Bracha 167:1 cites the Maharam Chaviv 23 who agrees with the Taz. He also cites the Radvaz 946 who says the same.
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| * "Levush's Heter Iska": Shulchan Aruch 177:18 based on the Rivash allows selling specific amount of items at a price that is cheaper than the market price. Then the buyer would stipulate that he wants the seller to deliver the goods by a specific date and if he doesn't do so he has to pay a penalty of a certain amount. Then the buyer would pay upfront and the seller would miss the delivery date and be obligated to return the original payment as well as the penalty. That isn't ribbit since it is a penalty and not a payment for the time value of money. Additionally since it is done completely with sales it isn't considered a loophole around ribbit. For this to work the seller actually needs the property he is selling and the buyer needs to make a legal acquisition of the property ([[kinyan]]). Levush 167:1 adds that the buyer needs to be ready that the seller actually deliver the goods by that date instead of paying the penalty. Taz 167:1 adds that this is forbidden if initially they stated that they want a loan since then the entire deal becomes a loophole to interest. Nekudat Hakesef 167:1 argues with the Taz since this case is completely a sale and therefore isn't an issue of finding a loophole to ribbit even if one originally requested a loan.
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| * Modern Heter Iska: Chelkat Yakov YD 68 explains that it isn't a legal loophole because the parties involved really intend to follow the contract and not violate interest. Chelkat Binyamin Kuntres Heter Iska n. 12 agrees. (In light of the Taz 167:1 and others it is hard to understand this explanation.) Minchat Shlomo 1:27 is troubled how the Heter Iska is permitted but yet allows it completely as is the practice.</ref></p>
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| # Is using a heter iska permitted<ref>Maaseh Rav n. 108 writes that the Gra disapproved of the heter iska altogether. See however Tosefet Maaseh Rav n. 28 which quotes Rav Chaim Volozhin as permitting it.</ref> initially or only after the fact or in a difficult situation? Some poskim hold that it is only permitted in extenuating circumstances in order to make a parnasa.<ref>The Sma (Derech Aruka n. 22), who popularized the modern heter iska, introduced it by saying that it should only be used as an ad hoc leniency for people to have basic needs. Malveh Hashem 13:27 concludes that the heter iska should only be used in extenuating circumstances. Mishpatei Ribbit 28:2 agrees.</ref> Others hold it is totally permitted when done correctly.<ref>Chatom Sofer 4:48, Imrei Yosher 2:192, Brit Yehuda 40 fnt. 1, Horah Brurah (Kuntres Heter Iska ch. 2). Brit Yehuda concludes that someone who wants to be lenient can be and someone who wants to be strict will be blessed.</ref> Nonetheless, one should ensure not to use it at the expense of doing the chesed of lending another Jew money for free when that is possible.<ref>Chafetz Chaim in Ahavat Chesed (Gemiliut Chesed 15) only complains that using the heter iska avoids lending money for free which is a chesed. Aseh Lecha Rav 1:60 (also printed in Or Torah 5732 Shevat siman 72) writes that the heter iska is permitted since it is for the purpose of business and only when a poor Jew asks for a loan a person may not use a heter iska and doing so would violate the basic principle of the halacha. Instead one should give them an interest free loan if one could. </ref>
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| # One may not use the heter iska to charge an amount that is unreasonable for the borrower to have made in his business or investment. Therefore, when using a regular heter iska, half loan half investment, one can only charge a percent that is reasonable for the borrower to have made with half of the money. That is, if the heter iska is to allow charging 7% for the entire iska transaction, it is only permitted if it is reasonable that the borrower will be able to make 14% on the iska, leaving 7% for the gain of the half investment. Otherwise charging higher rates is forbidden and oppressive to the borrower.<ref>Horah Brurah (Kuntres Heter Iska ch. 2) quoting Rav Meir Mazuz</ref>
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| # A heter iska can only be used if the borrower is using the money for a business or investment but not if he is using it for paying bills or household expenses.<ref>Horah Brurah (Kuntres Heter Iska ch. 2) citing Ginat Veradim 6:4, Perach Shoshan 6:1, Maharival 2:26, Pri Amada (Shelichin Ushutfin 6), Eretz Chaim 177:5, Chaim Byad 41, Graz 42, 46, Kitzur Shulchan Aruch 66:10, Har Hakarmel CM 25, Atzi Levona 177:6, Imrei Yosher 1:108, Hari Besamim 2:143, Erech Shay 177:7, Teshurat Shay 88, Chut Shani 18:3, and Malveh Hashem 13:10.</ref>
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| # Therefore one shouldn't overdraft from a Jewish or Israeli bank for personal needs since a heter iska doesn't help for that case. This is only permitted one has a business producing profits with which the heter iska can be applied.<ref>Horah Brurah (Kuntres Heter Iska ch. 3 p. 149)</ref>
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| # Some poskim permit using a heter iska if one has another business, assets, or savings plan any of which that are making profit and if not for the loan one would have sold that business, assets, or savings. The reason that it is permitted is because the heter iska could apply to that investment and its profits. If not for the loan one wouldn't have sold the business, assets, or savings plan anyway it is forbidden.<ref>Netivot Shalom p. 719 quoting Rav Elyashiv, Horah Brurah p. 148 agrees but adds if one has a business one doesn't need this leniency and one can just acquire for him a portion of your profits.</ref>
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| # The contracts that are made with a heter iska shouldn't include terms of interest but rather profits.<ref>Netivot Shalom p. 734 n. 34</ref>
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| # The poskim work to explain why the heter iska isn't considered a harama, legal subterfuge to avoid ribbit.<ref>Chelkat Yakov YD 68 writes that the heter iska isn't a harama because the people involved genuinely want to avoid any sin and so they fully mean to comply with all of the stipulations of the heter iska. Chelkat Binyamin Kuntres Heter Iska n. 12 agrees. (In light of the Taz 167:1 and others it is hard to understand this explanation.) Minchat Shlomo 1:27 is troubled how the Heter Iska is permitted but yet allows it completely as is the practice. Sefer Hazichronot cited by Brit Yehuda ch. 40 fnt. 1 writes that the heter iska is a harama. Maharsham 9:71 writes that the heter iska needs to be made in a way that is reasonable and not evident that it is going to come to interest since if there's a loss the borrower can swear he didn't gain and not pay any interest.</ref>
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| ===Conditions of the Heter Iska===
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| # Some heter iska's add a condition that if the borrower doesn't appear in bet din each erev rosh chodesh to submit his claims for his losses he has admitted that there were no losses. Some argue that this condition should not be added.<ref>Teshuvot Vehanhagot 6:181 argues that adding this clause of the Chayei Adam is a complete haarama and forbidden. He explains that the Chayei Adam is referring to a case where the investor wanted to know the deals of the business each month and as such he ask the borrower to inform him. However, for a bank that gives loans today they have no interest to know the works of each person's business monthly and requiring a borrower to do so is a complete mockery of halacha.</ref>
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| ===Complete Pikadon Heter Iska===
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| # An alternate heter iska that is in use today is where the entire sum is considered an investment and there's no loan at all. Some argue that one shouldn't use this heter iska.<ref>Brit Yehuda ch. 40 fnt. 2 writes that the gedolim of previous generations didn't endorse a complete pikadon heter iska since it isn't based on Chazal's institutions and is more of a harama.</ref>
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|
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| ==Lending Commodities==
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| # It is rabbinically forbidden to lend<ref>Rosh respona 108:7 implies that lending commodities isn't forbidden in it of itself but the prohibition is only violated if the lender ends up collecting more than he borrowed. (Chelkat Binyamin (biurim 162:5 s.v. haloveh) rereads the Rosh.) The Ramban Shabbat 148b s.v. ha certainly holds that opinion. However, the Chelkat Binyamin 162:1 learns from Tosfot b"m 75a that it is forbidden even to set up such a transaction even if one never collects any gain. That approach is adopted as the halacha bu Shach 162:13 and Chelket Binyamin.</ref> items for the same quantity of that item.<ref>Shulchan Aruch 160:21.
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| Why is it only rabbinic interest to lend commodities?
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| *Rosh responsa 108:6 writes that the reason is that Biblically you can repay the same quantity of a commodity for that commodity and that is Biblically required as part of your loan.
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| *Ritva 60b s.v. vtisbara, Ramban 60b s.v. ulbsof, Ran s.v. ulinyan, Nemukei Yosef s.v. eizhu batar mikara all write that it isn't Biblical interest since it isn't clear that a person will gain since the commodity might not go up in price. See also Taz 162:1 andRashi 62b sv bdiynenu safek.</ref>
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| # It is Biblically forbidden to lend an item for a greater quantity of that item. For example, lending 100 apples for 120 apples is Biblical interest.<ref>Devarim 23:20, Shulchan Aruch YD 160:21</ref>
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| # It is forbidden to lend an item to get back the same type of item. This is called ''Seah B'seah''. For example, lending out a 5 pound bag of flour to get back another bag of flour is forbidden.<ref>Bava Metsia 75a</ref>
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| # This type of rabbinic ribbit is permitted if the borrower has some of the same type of the item he is borrowing. For example, if someone has one egg and wants to borrow five more eggs they can do so since they already have one.<ref>Bava Metsia 75a</ref>
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| # Some poskim hold that it is permitted to lend an item that is small or cheap and people wouldn't care about the fluctuation in the price such as lending a loaf of bread.<ref>Rama 162:1, Yalkut Yosef CM 159:18</ref>
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| # It is forbidden even if one uses the language of selling them an item and the buyer will later sell back that item since the price might fluctuate in between and it is like a loan and not two sales.<ref>Taz 160:1 permits seah bseah when the language of sales is employed. Chelkat Binyamin 162:2 writes that many argue with the Taz including Binat Adam 139:7, Sharit Chaim, Igrot Moshe n. 27, Chazom Ish 72:5, and Ritva Shabbat 148a s.v. bshabbat.</ref>
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| ===Yesh Lo===
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| # If a person owns some of the commodity that he is borrowing he can borrow as much as he wants and it is like he sold the lender his commodity. It works even if the borrower only has a little bit of that commodity since it is like he borrowed it several times each time selling to the lender his commodity. It is permitted to do such a loan all at one time.<ref>Gemara Bava Metsia 75a, Shulchan Aruch 160:2</ref>
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| # Initially both parties should be aware that the borrower has some of that commodity. If they weren't aware of that, the transaction is nonetheless permitted and can be collected.<ref>Shach 160:7, Taz 160:3, Bach 160:2, Chelkat Binyamin 160:25, Laws of Interest 14:8 p. 271</ref>
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| # Ideally both parties should be aware that it is as if the borrower is selling his commodity to the lender.<ref>Chachmat Adam (Shaarei Tzedek 134:2)</ref>
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| # The borrower needs to actually own some of the commodity to permit this transaction and it isn't enough that people owe him some of that commodity.<ref>Gemara Bava Metsia 63b, Shulchan Aruch 160:2</ref> If the borrower has some of that commodity that is deposited with someone else that is sufficient to consider him yesh lo.<ref>Bet Yosef YD 162:2 writes that an item deposited with someone else (Pikadon) wherever it is is considered yours that it should be considered yesh lo for seah bseah. Tosfot Bava Metsia 6a writes that a person owns his pikadon can he sanctify it.</ref> If the borrower has some of that commodity but he borrowed it previously in a permitted fashion, some poskim say that it is sufficient to consider it yesh lo.<ref>Shulchan Aruch 160:2 holds that if he borrowed the commodity it is considered yesh lo since currently it is his. However, in Bet Yosef it is clear he is disagreeing with the Talmid Harashba who says it isn't yesh lo since he is going to have to return it. Bach 160:2 sides with the Talmid Harashba. Shach 160:8 follows the Bach. Taz 160:4 differentiates between where the original loan was made separately from the loan in which case it is yesh lo, whereas if the permitted loan was done only to permit the later loan which isn't yesh lo.</ref>
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| # It is insufficient for the borrower to have enough money or property to be able to repay the loan as long as the borrower doesn't own any of the commodity and there isn't any fixed marketplace price.<ref>Tosfot b"m 72b s.v. ein wonders why seah bseah isn't permitted if the borrower has any money or property with which he could use to buy the commodity to repay the loan even if he doesn't have that commodity and there's no marketplace price. In fact, the Hagahot Ashri 5:75 permits lending seah bseah if the borrower has money to buy the commodity to repay the loan. Bet Yosef 162:3 cites the Rambam Malveh Vloveh 10:1, Rif 43a, and Rosh b"m 5:61 who disagree with the Hagahot Ashri and concurs with their view.</ref>
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|
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| ===Yatza Hashaar===
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| # If there is a price that is fixed in the marketplace for that commodity it is permitted to lend that commodity.<ref>The Bahag read the Gemara Bava Metsia 72b as saying that it is permitted to lend a commodity if there is a fixed marketplace price. Rashi and Tosfot s.v. ein cite the Bahag. Rif 43a and Rambam Malveh Vloveh 10:1 agree. Tur and Shulchan Aruch 162:3 codify the Bahag.</ref>
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| # It must be known to both parties that there is a fixed price in the marketplace for that commodity.<ref>Rambam Malveh Vloveh 10:1 writes that the lender and borrower need to know the marketplace price in order to employ that leniency. Bet Yosef 162 explains that if they don't know of the marketplace price it appears as though they are intending to take interest.</ref>
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| # It isn't necessary for the borrower to have the money needed to buy the grain in the marketplace as long as there is a marketplace price it is permitted.<Ref>The Baal Hatrumot 46:5:5 cites the Raavad (see Malveh Vloveh 10:1) who holds that in order to apply the leniency of the marketplace price being established for seah bseah it is necessary for the borrower to have the money available to be able to buy the grain to repay the loan. Tosfot b"m 72b s.v. ein agrees. However, most rishonim disagree including the Rambam Malveh Vloveh 10:1, Rif 43a, and Ramban b"m 72b s.v. ein. Bet Yosef 162:3 and Shach 162:10 rule like most rishonim unlike the Raavad.</ref>
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| # Some say that it is forbidden to lend commodities when the marketplace price is fixed if the lender specifies the time that the commodity needs to be returned, however, the halacha doesn't follow that opinion.<ref>Rambam Malveh Vloveh 10:1 holds that it is only permitted to lend commodities with a marketplace price that is fixed if the lender doesn't specify a time. However, the Raavad, Rosh responsa 108:15, and Rashba responsa chadashot 75 disagree. Rama 162:3, Gra 162:14, and Shach 162:11 concur that we don't follow the Rambam.</ref>
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| # If one place has a fixed marketplace price other nearby places can rely on that place.<ref>Bava Metsia 72b, Bet Yosef 162:3, Hagahot Mordechai b"m n. 439, Taz 162:5</ref>
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|
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| ===One Commodity for Another Commodity===
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| # If one lends one commodity for another commodity of the equivalent value it is forbidden perhaps the value of commodity that needs to be returned will increase in price. This is forbidden even if the borrower has some or all of the quantity of the commodity necessary to repay the loan and it is forbidden even if the marketplace price for the commodity to be returned is fixed.<Ref>The Raavad cited by Baal Hatrumot 46:5:7 and Tur 162:5 explains that the leniencies of seah bseah only apply when one is borrowing one commodity to repay that same commodity. However, if one repays another commodity it is forbidden even if it is yesh lo and yatza hashaar. Shulchan Aruch Y.D. 162:5 codifies the opinion of the Raavad. The Perisha 162:21 explains that when one repays a loan with the same commodity it doesn't appear as interest since the difference in price between the loan and repayment isn't viewed as significant. However, once the repayment is in another commodity it is viewed as interest. Therefore, the leniencies of seah bseah don't apply here. Similarly, Netivot Shalom 162:5 explains that once one is trying to gain another commodity it appears as though one is investing in order to gain, however, when one lends one commodity to get back the same quantity of that commodity it doesn't appear as though one is trying to invest. Chelkat Binyamin interprets the Levush 162:5 as explaining that since the difference between the prices is relative and can change yatza hashaar doesn't help. Additionally, since the second commodity isn't a complete payment of the first commodity even yesh lo is insufficient.</ref>
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| #This is only forbidden when one states this with the language of a loan but not if one says that one is selling one commodity for another.<ref>Shach 173:16 writes that based on Tosfot Bava Metsia 46a anytime one is repaying with another commodity it is permitted since it is considered a sale and not a loan. However, when one uses the language of a loan it is nonetheless treated like a loan and interest is forbidden. The Taz 162:9 states this same opinion with respect to the Raavad. Rabbi Akiva Eiger 162:5 connects the Taz with the Shach. Chavot Daat 161:1 as explained by the Netivot Shalom 162:5 holds that anytime one repays a commodity with another one it is automatically a sale on a Biblical level and there is only a rabbinic issue of interest.</ref>
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| ===Demanding Repayment When It Is More Expensive===
| |
| # If the lender demands the borrower to repay the loan specifically at a time when the commodity is generally more expensive in price that it is forbidden unless the borrower has some of the commodity.<ref>Rosh responsa 108:15 writes that even though it is permitted to lend commodities when there is a marketplace price it is forbidden when you specify that it is repaid at the time of the higher amount. Rama 162:3 cites a ruling similar to the Rosh from the Kol Bo and Smak. Shach 162:11 quotes the Rosh and in fact explains that the Rama intended to rule like the Rosh and the Kol Bo and Smak mean this as well. The Chelkat Binyamin biurim on 162:3 writes that there is a major dispute as to the meaning of the Kol Bo and Smak. The Shach as the Chelkat Binyamin explains holds it is forbidden to demand repayment of the commodity at a time when the price generally is more expensive.</ref>
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| # If the lender demands the borrower to repay the loan specifically at a higher price it is forbidden unless the borrower has some of the commodity.<ref>Kol Bo 84 and Smak 260, Rama 162:3. The Chelkat Binyamin biurim on 162:3 clarifies that the Kol Bo and Smak actually said that if a person specified that the commodity that was lent out needs to be repaid when it'll be more expensive on the market that it is forbidden and it is implied that it is Biblically forbidden.</ref>
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|
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| ===Stocks===
| |
| #It is permitted to buy stocks and it isn't considered ribbit since it is an investment.<ref>Malveh Hashem 2:13:29 p. 169 writes that buying a stock is an investment in the company and has risk. Therefore, there is no question of interest. Marechet Hashulchan Ribbit p. 417, Mishna Halachot 5:116, and Mishpatei Ribbit v. 2 p. 356 citing Brit Yehuda 2:42 agree.</ref>
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| # Short selling is a violation of borrowing commodities with interest. This type of transaction between two Jews is forbidden since the leniencies of borrowing commodities, namely, having a fixed market price that endures for a long time or having a position in that the stock one is short selling, are inapplicable.<ref>[https://traditiononline.org/short-selling-and-jewish-law/ Rav Aharon Levine (Tradition Spring 2010 pp. 67-71)] explains that short selling involves borrowing a commodity which is repaid with that commodity and not merely a cash loan. The commodities in this case are the stocks being sold short. Since the marketplace price is in flux constantly that doesn't permit the seah b'seah transaction. Additionally, the fact that selling outside the box is illegal prevents a person from shorting a position he already owns stock in. Therefore, it isn't possible for someone to have the stocks that he is borrowing while doing a short sell.</ref> For a Jewish marketplace this is a serious issue because either way there is an interest charge for borrowing the stocks for the time. Therefore, these issues need to be solved with a heter iska.<ref> Torat Ribbit 17:33 agrees that short selling is considered seah bseah and therefore forbidden. Additionally, he adds that the seller can’t return the dividends. If the stock price drops after the dividend its price reflects that then it is a shutfut and the seller who borrowed the stocks is entitled to them and returning them would be interest. A specific heter iska can be used. [https://www.toraland.org.il/%D7%A9%D7%90%D7%9C%D7%95%D7%AA-%D7%95%D7%AA%D7%A9%D7%95%D7%91%D7%95%D7%AA/%D7%9B%D7%9C%D7%9B%D7%9C%D7%94-%D7%95%D7%9E%D7%A9%D7%A4%D7%98/%D7%9B%D7%9C%D7%9B%D7%9C%D7%94-%D7%95%D7%94%D7%9C%D7%9B%D7%94/%D7%9E%D7%9B%D7%99%D7%A8%D7%94-%D7%91%D7%97%D7%A1%D7%A8/ toraland.org.il] agrees.</ref>
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| # Buying stocks on margin is forbidden if the brokerage is Jewish since it is lending to the investor money to be able to buy the shares and charging them interest for that loan. This is Biblical interest, but it can be permitted with a heter iska.<ref>Laws of Interest 1:25, Mishnat Ribbit p. 62, Mishna Halachot 5:116</ref> A regular heter iska doesn't work for this case.<ref>Mishnat Ribbit p. 62</ref>
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| # Buying a future contract of stocks doesn't involve interest.<ref>Ribbit Btachnit Chischon Lkol Yeled p. 33 writes that there's no ribbit with future contracts since there is no sale of the stocks until the settlement date at which point the money is paid and the stocks or the equivalent are exchanged. Therefore, he argues that it isn't similar to pesika (buying commodities at a future date). Even though there is a down payment made it is merely a security deposit and not a loan. He cites this from the Mishpat Shalom CM 209.</ref>
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| # If a person leaves money in a Jewish investment account and it accrues interest leaving money there is forbidden since that would be Biblical interest. However, this transaction can be permitted with a heter iska.<ref>Laws of Interest 1:24, Mishnat Ribbit p. 62</ref> Some poskim would permit collecting interest if the brokerage firm is incorporated.<ref>Laws of Interest 1:24 based on Rav Moshe (Igrot Moshe 2:63)</ref>
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| # Buying and selling options is permitted.<ref>Torat Ribbit 17:36 permits buying and selling options since they can go up or down. If you buy from the open market certainly it is a sale and even if you do it with your broker it is still like a sale and not like an advanced cash payment to get a cheaper deal later. Takanat Haribit p. 47 also permits and thinks it isn't asmachta since it is legally binding. Seder Haribit v. 1 p. 289 writes that buying options is permitted since it is a sale. It isn't like pesika al peirot since you don't necessarily get the fruit you're just buying the right to get them. This is explained by [https://www.yutorah.org/lectures/lecture.cfm/946426/rabbi-ike-sultan/ribbit-investing-in-bonds,-stocks,-short-selling,-naked-shorts,-buying-on-margin,-buying-futures,-options,-money-market-funds-as-they-relate-to-interest/ Rabbi Sultan (Investing in Bonds, Stocks, Short Selling, Buying Futures, Options)]. See Yeshurun v. 33 p. 625-6 who discusses whether options is an issue of ribbit and considers that perhaps it isn't considered a loan at all but a sale. See there at length.
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| * The Shaarei Bracha 166:1 cites the Maharam Chaviv 23 who permits buying from someone the following option: if an investment doubles by a certain date then the provider of this option pays nothing, and if the investment doesn't double then the provider needs to pay the difference between the amount of the investment and double the original investment. In essence this is buying a put option and it is permitted. His proof is Shulchan Aruch Y.D. 173:19 who allows buying insurance.</ref>
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|
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| ===Lending Commodities as Part of a Work Contract===
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| # If a person hires a worker to plant a field if the employer wants to provide the seeds as a loan and get repaid afterwards he can do so. If it is common for the worker to supply the seeds to plant it the employer can arrange this loan at any time, but if it is common for the employer to supply the seeds to plant it then the employer can only make this arrangement if the worker didn't begin his work.<Ref>Gemara Bava Metsia 74b, Shulchan Aruch Y.D. 162:4. The reason is that before the worker starts his work the employer can build into the contract the arrangement for him to lend the worker his supplies and he'll get repaid. Since it is all part of the original contract it is considered hiring the worker for a lesser wage. However, once the worker starts working the employer can't retract and change the wages. Therefore, if he decides to lend him the commodities for the job it is seah bseah and is problematic. If the worker in that place is supposed to supply the seeds and begins his work it is as though he didn't begin his work since he is unprepared and as such it is still possible to renegotiate his wages.</ref>
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| # This leniency wouldn't permit a commodity loan if the worker will use the commodities for anything other than for his work.<ref>Mishna Bava Metsia 74b states that this arrangement with a worker can't permit giving the worker seeds to consume. Chelkat Binyamin on 162:4 cites this.</ref>
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|
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| ==Involvement with Interest==
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| #Anyone involved in the interest transaction, such as the lender, buyer, witnesses, scribe, or another intermediary is violating the halacha of ribbit.<ref>Bava Metsia 75b, Tur and Shulchan 160:1, Shach 160:1</ref>
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| # It is forbidden to give a gift when returning a loan when if one doesn’t specify that it is because of the loan.<ref>Rashi 73b s.v. achulei implies that as long as one doesn’t specify that a gift isn’t because of the loan it is permitted even at the time of returning the loan. However, the Rosh b”m 5:67 argues that it is only permitted after payment of the loan. Bet Yosef 160:4 cites the Talmidei Harashba who says that it is only permitted to give an extra gift if it was a sale and not a loan.</ref>
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|
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| ==Foreign Currency==
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| # Rashba respona 4:287 forbids lending money of one currency for another currency since the coins change fixed with respect one to another.
| |
| ===Expired or Altered Currency===
| |
| <p class="indent">The system of coins used in the days of the Gemara and Shulchan Aruch were intrinsically valuable commodities, such as silver or gold. In that system the size and weight of the money and the value of that metal determined the value of the coins.<ref>Gemara Bava Metsia 44a-b</ref> This is known as [https://en.wikipedia.org/wiki/Commodity_money commodity money] and is associated with the theory of economics [https://en.wikipedia.org/wiki/Metallism metallism]. Another system used is [https://en.wikipedia.org/wiki/Representative_money representative money] which could be used to redeem a commodity; this is also known as the [https://en.wikipedia.org/wiki/Gold_standard gold standard]. In 1971, America replaced this system with [https://en.wikipedia.org/wiki/Fiat_money fiat money], theoretically understood by [https://en.wikipedia.org/wiki/Chartalism chartalism], which has no intrinsic value and no representative value but has a value based on the government.</p>
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| ====Fiat Money (Chartalism)====
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| # Today most money is paper or digital money, which has no intrinsic value and not representative of a commodity value. It is evaluated according to the assigned value according to the government and world markets.
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| # It is forbidden to lend money and charge for inflation.<ref>Igrot Moshe YD 2:114 explains that since halacha views coins as stable and not changing charging for the inflation of the purchasing power of the coins is interest. The only time coins are reevaluated in Shulchan Aruch Y.D. 165:1 is if the coins changed sizes, however, the Rama there writes that if the purchasing power changed but not the size of the coin then one must return the new coins irrelevant of the inflation. Chazon Ish YD 74:5, Minchat Yitzchak 1:70, 6:161, and Laws of Ribbis p. 52 agree. Note that Rav Moshe is discussing fiat money in 1971 and the Chazon Ish representative money as is evident in their words.
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| * Gemara Bava Kama 97a discusses whether a person who borrowed coins and the coins expired under the monarch they were minted under can return those same coins now that they are expired. Shmuel holds that you are supposed to return the old coins since the coins expiring isn't like they broke. </ref>
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| # If a coin is invalidated and replaced with a new coin in a fiat money system the new coins need to be repaid since the size and weight of the old or new coins are irrelevant to the value of the coin. If the new coins has a different purchasing power compared to the old coins, if someone lent money in an old coin one must return the new coins according to the value the new coins have in relation to the old coins.<ref>Chazon Ish YD 74:5</ref>
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| ====Commodity Money (Metallism)====
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| # If the new currency is the same size and weight as the old currency but its purchasing power is different one can simply repay the loan with the new currency.<ref>Rama 165:1</ref>
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| # If a person lent someone money in a currency and then that currency become invalidated and was replaced with a new coin, if the new coin is thicker or weightier than the old one, whether or not one can simply repay the loan with the new currency depends on the following factors:
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| ## If the prices of the marketplace reflects the new coin's thickness or weight then one can't repay the loan with the new currency, rather one should pay the amount of the new coins so that the sum total equates to the amount of silver of the old coins borrowed.<ref>Shulchan Aruch 165:1</ref>
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| ## If the prices of the marketplace do not reflect the new coin's thickness or weight and simply changed prices because of changes in supply and demand, one can repay with the new currency unless the new coin is more than 25% larger, in which case one needs to repay the amount of silver borrowed with the old coins.<ref>Shulchan Aruch 165:1</ref>
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| # If one should have paid the new coins up to the quantity of silver that was borrowed and instead one repaid the loan with the new currency some say that it was a violation of Biblical interest and some say rabbinic.<Ref>Shach 165:2</ref>
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| # We rely on non-Jewish experts to tell us that the coins are more or less than 25% larger than the old coins. If you are asking a hired professional economist they are trusted and if you're asking someone else you should ask two non-Jews one not in front of the other.<ref>Rama 165:1, Shach 165:7</ref>
| |
| # If the government establishes how the old loans should be repaid then one can follow that standard based on [[dina dmalchuta dina]].<ref>Rama 165:1, Shach 165:8</ref>
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|
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| ==Future Contracts of Commodities==
| |
| # It is forbidden to pay in advance for the later delivery of a commodity since it is possible that the price of the commodity will rise. The two ways to permit this is if the seller has the commodity already or the marketplace price is already fixed.<ref>Shulchan Aruch Y.D. 163:1</ref>
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| # If the price of the commodity drops the buyer can renegotiate his part of the deal and buy it for cheaper.<Ref>Mishna Bava Metsia 72b, Shulchan Aruch Y.D. 175:7</ref>
| |
| ===Marketplace Price Fixed (Yatza Hashaar)===
| |
| # If the price of the marketplace is fixed it is permitted to pay in advance for the later delivery of a commodity. The reason is since the marketplace price is fixed it is possible for the seller to purchase the commodity immediately with the funds of the buyer. Therefore, it is as though the commodity is already in the position of the seller.<ref>Mishna Bava Metsia 72b, Shulchan Aruch Y.D. 175:1</ref>
| |
| # This leniency works independent of the leniency of the seller owning the commodity (Yesh Lo).<Ref>Shulchan Aruch 163:1. See Gra 163:3 who cites Rashi who disagrees and requires both where the original sale starting with a loan.</ref>
| |
| # It is forbidden for the seller to charge less than the marketplace price since the buyer is paying in advance, even though the marketplace price is fixed.<ref>Shach 163:4 writes that the leniency of Yatza Hashaar when the contract was set up with a loan doesn't allow charging more than the marketplace price. He is writing this to answer the doubt of the Prisha. Shulchan Aruch 175:1 and 173:7 clarify this point that when using the leniency of Yatza Hashaar one must charge only that price and not a lower price.</ref>
| |
| ===Has a Position of that Commodity (Yesh Lo)===
| |
| # If the seller of the commodity already has the commodity at the time of the transaction it is permitted. Since the seller has the commodity at the beginning we can view the transaction as though he sold the commodity immediately for the fair marketplace price.<ref>Mishna Bava Metsia 60b, Rav Oshiya on 63b, Shulchan Aruch Y.D. 163:1</ref> Even though they didn't formally have the buyer acquire that commodity at the beginning of the sale since this is only rabbinic interest it is permitted.<ref>Rashi writes that once money is paid the seller can't back out and if he does he is cursed with a Mi Shepara. However, the buyer didn't make a formal [[kinyan]] but it isn't necessary since this is only rabbinic interest. Bet Yosef 163:1, Taz 163:3, and Shach 163:3 cite this Rashi.</ref>
| |
| # The seller has to have the full quantity of the commodity to fulfill his end of the deal at the time of the transaction for this leniency to apply.<ref>Rambam Malveh Vloveh 10:6, Ritva b"m 63a s.v. veshma mina, Shulchan Aruch Y.D. 163:1. Chelkat Binyamin 163:7 clarifies that even though the Rabbenu Yerucham was lenient even if the seller only had some of the commodity we follow the Shulchan Aruch.</ref> It isn't similar to the rules of seah bseah since this is considered a sale and not a loan. Therefore, it is necessary for the seller to sell his commodity to the buyer and having part of the commodity is insufficient, whereas for a loan, it is possible to view it as though the borrower lent out his commodity multiple times since something that he lent out remains in his property.<ref>Shach 163:2 and Taz 163:2</ref>
| |
| # The seller is believed to say that he has the commodity he is transacting.<Ref>Rama 163:1</ref>
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| # This leniency is specific to where the seller has the commodity and doesn't extend to where the seller has cash with which he could use to buy the commodity.<ref>Shulchan Aruch 163:1. The Rosh b"m 5:7 implies that it is sufficient for the seller to have cash. Bet Yosef 163:1 argues that this is a mistake and obviously it is necessary to have the commodity and cash is insufficient. The Tiferet Shmuel 5:1 and Pilpula Charifta 5:7:30 agree. Maharam Shif 63a s.v. haashri presents an approach to explain the Rosh if he actually meant that money is sufficient. Taz 163:4 argues that the Rashi, Tur, and Rosh hold that money is sufficient but decides that we should be strict. Gra 163:1 points out that the Mordechai and Hagahot Ashri in fact do have this leniency even if one just has cash. He also concludes that the Rambam thinks it is necessary to have the commodity and not just money.</ref>
| |
| # It is permitted to charge a lower price than the marketplace price if the seller has the commodity at the time of the transaction. This isn't similar to relying on the leniency of Yatza Hashaar.<ref>Tosfot Bava Metsia 63b s.v. vamar, Ramban b"m 46a, Shulchan Aruch 173:7</ref>
| |
|
| |
| ===Repaying a Loan with a Future in Commodities===
| |
| # When a person purchases a commodity at a future date by making an advanced case payment there are two possible leniencies: if the seller has the commodity or if the marketplace price is fixed. However, if the original transaction is a result of a loan that the seller owed to the buyer and he is using that loan to purchase a future of commodities this transaction can only be permitted when the seller owns the commodity.<ref>Bava Metsia 63a, Shulchan Aruch 163:1. Rabba in b"m 62b and Rav Oshiya on 63a explain that when a person pays the lender with a commodity at a future date there is a concern for ribbit since the price of the commodity might rise. This problem isn’t solved by the fact that there is an established market price since the borrower wouldn’t be able to buy the commodity with the pre-existing loan. Therefore, if the borrower wants to pay with a commodity at a later date and there is a concern that the commodity will change prices in between it is forbidden to do so since the transaction began as a loan and he might be repaid more than he lent. This is forbidden even if the price of the commodity is established in the marketplace.</ref> The reason for this distinction is because the leniency of having a marketplace price fixed is that it is possible for the seller to cover his obligation by purchasing the commodity in the marketplace at the time of the transaction. However, if he is doing this transaction as a repayment of a loan that unpaid debt can't possibly be used to buy a commodity in the market.<ref> Shach 163:4, Taz 163:4.
| |
| * Rashba 62b clarifies that although when discussing seah bseah it is sufficient to have some of the commodity and halachically we consider it as though there were multiple sales using this commodity. However, in the case of a loan that was exchanged for a commodity it remains a loan and in order to permit the potential interest it is essential that it is viewed as a real sale. It is only possible to consider the exchange a real sale if the borrower has the quantity he is offering the lender at the time of the agreement to exchange for the commodity.</ref>
| |
| # A person purchased a commodity at a future date with a preexisting loan that the seller owes him. As explained this is only permitted if the seller has that commodity. If later at the time of the delivery date they renegotiate that the seller will exchange the first commodity with another one, it is only permitted if the seller has the second commodity.<ref>Mishna Bava Metsia 60b, Shulchan Aruch Y.D. 163:2</ref>
| |
| # A person purchased a commodity at a future date by making an advanced cash payment. Later when the commodity is due to be delivered he renegotiated with the seller to exchange the commodity he was supposed to acquire with another commodity for the current value of the commodity he is owed. This transaction according to some is only permitted if the seller owns a position of the second commodity that is sufficient to cover paying out this transaction. However, according to others it is permitted as long there is a fixed marketplace price.<ref>Rif bava metsia 34b, Nemukei Yosef 34b quoting Rabbenu Chananel and Rav Hai Goan, Rashba 62b s.v. vki, and Gra Y.D. 175:10 are lenient. The Rif explains that as long as the initial transaction was a sale in the future of a commodity and not a loan it is permitted to switch over the first commodity to the second even if the borrower doesn’t have the commodity.</ref>
| |
|
| |
| ===Stipulations for a Default on a Loan===
| |
| # It is forbidden for a person to stipulate that if the borrower can't repay his own he must give a certain commodity to the lender for the price of the commodity that it was worth at the time of the loan. Since this transaction was conditionally a loan it must follow the rules of a loan exchanged for a future in commodities.<ref>Bet Yosef 163, Shach 163:4</ref>
| |
| ===Future Contracts===
| |
| # It is permitted to do a future contract for a commodity or stock when one doesn't buy the commodity now at all and doesn't pay for it but merely pays a margin deposit. That is considered as though one agreed to buy or sell something at a later date and there's no advanced payments.<ref>Ribbit Btachnit Chischon Lkol Yeled p. 33 writes that buying a future contract isn't considered like pesika since it is only an arrangement that one promises to later buy something when the contract is due. The fact that money is paid for the contract in advance is purely a deposit and that is why there is no interest paid for buying a future contract. He cites Mishpat Shalom cm 209 in his support.</ref>
| |
|
| |
| ==Collateral Fields==
| |
| # It is forbidden for a lender to use the collateral that the borrower provided without certain conditions.<ref>Shulchan Aruch 164:4</ref>
| |
| # If the lender eats the fruit of the field of the borrower that was a collateral some say that it is Biblical interest,<Ref>Shulchan Aruch Y.D. 164:4</ref> while others hold it is only rabbinic interest.<ref>Rama 164:4</ref>
| |
| ==Legal Subterfuge==
| |
| # A person asks for a loan of $100 and the lender isn't interested. The lender counter offers him to lend him $100 worth of a commodity and he can sell it for that value and use the money. Then the borrower takes the commodity worth a $100 and offers the lender to buy back the commodity for $90. If the buyer accepts that deal it is forbidden since in effect the borrower borrowed $90 and is obligated to return $100 which is interest.<ref>Bava Metsia 62b, Shulchan Aruch Y.D. 163:3</ref>
| |
| # This is considered legal subterfuge and even though it is forbidden to arrange, if it is already arranged, according to Sephardim the borrower can repay the full loan. However, according to Ashkenazim the the borrower shouldn't repay the full value of the loan since this is considered rabbinic interest.<ref>Shulchan Aruch and Rama 163:3</ref>
| |
| # If between the time of the loan and the time of the resale of the commodity to the lender the price of the commodity dropped to $90 then it is permitted to sell the commodity back to the lender.<ref>Taz 163:6</ref>
| |
| # If the borrower never took the commodity but everything was transacted orally it is considered rabbinic interest in all circumstances.<ref>Shach 163:6</ref>
| |
| # If the borrower stipulated with the lender that they would go through with this entire series of transactions it is certainly interest.<ref>Rama 163:3. Rama implies it is Biblical interest while the Bach cited by Shach 163:11 explains that it is only rabbinic interest.</ref>
| |
| # There is a dispute if it is permitted if the borrower only sells the commodity back to the lender at another time.<ref>Taz 163:7 is lenient since it doesn't appear like interest but two separate transactions. Nekudat Hakesef 163:3 forbids. Chelkat Binyamin 164:27 additionally cites the Graz, Tiferet Lmoshe, and Avnei Nezer who are strict, unlike the Chachmat Adam who is lenient.</ref>
| |
| ===Renting a Field to a Borrower===
| |
| # A person borrowed money and as a collateral gave the lender a field. Generally, the lender may not make use of that field without certain conditions. The lender then rents out the field to the borrower for a fixed rate. That is considered legal subterfuge to charge a borrower interest on his loan and is forbidden.<ref>Gemara Bava Metsia 68a, Shulchan Aruch Y.D. 164:1. Shach 164:1 explains that Shulchan Aruch holds like Rashi that doing so is Biblical interest.</ref>
| |
| # If the entire series of transactions were stipulated from the beginning it is certainly forbidden.<Ref>Rama 164:1</ref>
| |
| # If the field as a collateral was used by the lender and for that use a deduction was made to the loan for each year until the entire loan would be paid off, then if there is someone else in between the borrower and lender it is permitted. That is, if the lender rents out the field to someone else and that person then lends it to the borrower it is permitted.<ref>Shulchan Aruch 163:2</ref>
| |
| # It is permitted to sell a field to someone and then rent it from them.<ref>Shulchan Aruch 164:3</ref>
| |
|
| |
| ==Judging by the Time of Stipulation==
| |
| # It is considered Biblical ribbit to lend 100 items to get 120 items in return, even if at the time of the return those 120 items afterwards are the same price as the 100 items were at the time of the original loan.<ref>Gemara Bava Metsia 60b, Shulchan Aruch Y.D. 160:21</ref>
| |
| # It is considered rabbinic ribbit to lend 100 items to get 100 items in return even if at the time of the return those 100 items are worth more than the price of the 100 items were originally.<ref> The reason that this is only rabbinic ribbit and not Biblical ribbit is because we judge the situation whether something is ribbit or not based on the stipulation at the time of the loan. That is the ruling of the Shach YD 160:35 and Gra 160:53. This is also the opinion of the Ritva 61b s.v. vtisbara, Ran, and Talmid Harashba cited by Bet Yosef 160:21. However, the Hagahot Ashri 6:1 writes that this was the doubt of the gemara whether we judge the deal from the stipulation or the time of the return and if we judge it by the time of the return it is considered ribbit. This case might therefore be ribbit Biblically. The Granat explains that even the Hagahot Ashri only considers it Biblical ribbit if it is an exchange of currency which is uncommon but not with actual commodities which is certainly rabbinic. </ref>
| |
|
| |
| ==Land or Documents==
| |
| # Ribbit applies to lending land in order to receive more in return or the same land together with something else in return. This is considered Biblical ribbit.<Ref>Tosfot Bava Metsia 61a s.v. im holds that based on a klal uprat uklal land is excluded from the laws of ribbit. Rosh b”m 5:1 and Ran b”m 61a s.v. karkaot agrees. Tur 161:1 cites Ri who agrees. Bet Yosef cites the Rabbenu Yerucham who is strict. The Rabbenu Yerucham 1:8 is citing the Rashba b”m 61a minayin, however, in our versions of the Rashba it seems in conclusion he is lenient. The Bet Yosef isn’t certain if there’s a rabbinic prohibition even according to Tosfot. Taz 161:1 says obviously there is a rabbinic prohibition. Certainly Tosfot adds that money to receive some land or benefit from land is forbidden. The Shach 161:1 and Taz 161:1 who point out that Shulchan Aruch 161:1 seems to be strict. See Gra 161:1 who might be lenient to consider it only a rabbinic prohibition. </ref>
| |
| # Ribbit applies to money given in a document.<ref>Rosh Bava Metsia 5:1 writes that theoretically documents should be excluded from ribbit because of a klal uprat. However, he notes that there’s no case of a loan with a document, giving a loan to receive it return with an interest on the side is a rental. Bet Yosef 161:1 asks why it isn’t considered a loan to give a document of debt that is worth 100 to receive in return a document of debt of 200. Bach 161:1 and Taz 161:1 both argue that such a deal would certainly be ribbit since the document merely represents money.</ref>
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|
| |
| =="Keep the Change"==
| |
| # It is forbidden to lend money in order to get less than a prutah more than he lent.<ref>Tosfot Bava Metsia 61a s.v. im writes that based on a klal uprat it is possible to deduce that less than a prutah is excluded from ribbit. Rosh agrees. However, The Tur 161:1 cites the Ramah who disagrees. See Ritva 61a fnt. 35 who points out that the Ramah cited by Shitah Mikubeset 61a seems not be discussing this idea. Shulchan Aruch 161:1 follows the Ramah. See fnt. to Ritva who cites the Gedulei Trumah 46:1:1 who explained that the only dispute is whether a person can lend less than a prutah to receive interest but the Mishneh Lmelech Hilchot Malveh Vloveh 6:1 disagrees and says that it is a dispute where the loan is greater than a prutah to gain interest that is less than a prutah. Rav Elyashiv on Bava Metsia 61a s.v. sham btosfot comments that the Gra explains the Ramah who says that it is forbidden to take less than a prutah because a half shiur of something prohibited is also prohibited. Rav Elyashiv questions this because perhaps taking less than a prutah in one loan can’t possibly combine with another less than a prutah unless it would be another loan. </ref> After the fact if one collected interest worth less than a pruta some hold that it doesn't need to be returned.<ref>Shach 161:3 cites the Levush who suggests that the reason we don't collect less than a shava pruta is because Bet Din wouldn't a judge case of less than a shava pruta. However, Shach 103:3 argues. Chelkat Binyamin 161:4 cites the Prisha who said that the mitzvah to return it doesn't apply if it is less than a shava pruta. These two approaches differ with respect to whether there is a heavenly obligation to return less than a shava pruta, according to the Prisha there isn't.</ref>
| |
| # There is no time limit to be considered a loan, even a loan for a moment is a loan and is subject to interest. This is true even if the time lapse isn't for the time-value of money but purely because of a convenience.<ref>Laws of Ribbit p. 116, Brit Yehuda 2:3. The Brit Yehuda writes that it is forbidden even though there's no need for a time lapse but the loan is purely for a convenience of the borrower. For example, he cites the Talmid Rashba (cited by Bet Yosef 173) and Ritva 46a regarding someone who asks for a loan while in the marketplace to purchase an item and then offers to repay the loan with interest when they walk together to his home. The Talmid Rashba concludes that paying that interest isn't ribbit since it isn't for the time lapse but for the convenience. Brit Yehuda isn't certain whether the Talmid Rashba meant to permit even charging for the convenience of the borrower or just the convenience of the lender. Either way, the Brit Yehuda argues that the rishonim and poskim absolutely do not accept this view. Additionally, you could only pay for the exact amount of the fair wage of the inconvenience otherwise caused to the lender.</ref>
| |
| # It is questionable if it is permitted to borrow something and return back a tiny bit extra. For example, if you split a cab and one person pays the whole fare and the other person owes him $4.96, it seems problematic to pay the full $5 and say keep the change. The reason is that giving the extra four cents is interest which you're paying at the time of the loan.<ref>Shulchan Aruch 160:4 holds that it is forbidden to give a gift at the time of the return of the loan even if one doesn't specify that it is for the loan. Shach 160:4, Taz 160:2, and Chavot Daat 160:2 agree.</ref> Many poskim permit it when it is an amount that is insignificant to both of them (that if it fell on the ground they wouldn't pick it up) and some specifically permit it when you say give the change to [[tzedaka]].<ref>Minchat Yitzchak 9:88, Chelkat Binyamin 160:33, Horah Brurah 160:15, Laws of Ribbit p. 43, [https://www.yutorah.org/lectures/lecture.cfm/945081/rabbi-ike-sultan/ribbit-keep-the-change-(scott-hoberman)/ Rabbi Hoberman ("Keep the Change")]</ref>
| |
| ==Checks==
| |
| # Some poskim allow selling a check that is able to be cashed immediately for less than its face value.<Ref>Malveh Hashem 2:15:25 is lenient because one is selling it for less because of the inconvenience of having to cash it and also it is done as a sale and not as a loan. See Laws of Interest p. 217 who is lenient to sell a check at a discount.</ref>
| |
|
| |
| ==Repaying Interest==
| |
| # Biblical ribbit must be returned otherwise it is permitted to seek a bet din to collect it.<ref>Rabbi Elazar 61b, Shulchan Aruch 161:2</ref>
| |
| #There is a religious obligation to pay back derabbanan ribbit.<ref>The rishonim debate whether there’s a religious obligation to pay for deoritta ribbit according to Rabbi Yochanan who says that there isn’t a monetary claim upon the lender. Tosfot 62a s.v. tenay holds that there’s no obligation but Rivan holds that there is. Rashba 62b cites the discussion and Ritva sides with Tosfot. Nemukei Yosef 34a sides with the Rivan. The Rashba concludes that there’s no practical application to this dispute because we hold that there is a monetary obligation to return ribbit. The Ran and Ritva argue that from this discussion you can learn how to treat rabbinic ribbit whether this is a religious obligation to return ribbit derabbanan. Ritva holds that there’s no obligation to return rabbinic ribbit, however, the Ran and Nemukei Yosef holds that there is. Rashba holds that there’s no obligation. Riaz Bava Metsia 62a s.v. elah accepts the Rashba that there’s no comparison between what Rabbi Yochanan held to what we should hold for rabbinic ribbit since Rabbi Yochanan held that someone who collected ribbit owns the money he collected but Rabbi Elazar argues that it isn’t his at all. He concludes that for rabbinic ribbit it doesn’t need to be returned if a person is doing it as part of teshuva. Shulchan Aruch 161:2 holds like the Nemukei Yosef.</ref> Some say that this doesn’t apply to ribbit paid before and after the loan.<ref>Rashba 5:187 writes that if a person gave ribbit after the loan the receiver doesn’t have to return it even as a religious obligation and he adds that ribbit after the loan is less serious than other forms of rabbinic ribbit. Rashba 1:938 writes that the prohibition of giving ribbit after the loan only applies to the receiver and not the borrower. Bet Yosef 161:2 cites the Rashba as a proof that there’s no religious obligation to return ribbit paid after the loan. Rama 161:2 codifies this opinion.</ref>
| |
| # A person who took interest should return it. If he offers to return it and the other person forgives his fellow from paying him back the person who took interest can keep it.<ref>Rambam Malveh Vloveh 4:13 and Rosh b”m 5:2
| |
| * The Raavad 4:13 agrees with the Geonim that forgiving the loan is ineffective. Their reason is that it seems that the torah invalidated forgiving the interest as is always the case of interest, even though a person willing lends money with interest it is still forbidden. Similarly, the Geonim say that interest that was taken illegitimately can’t be forgiven and needs to be returned. The Maggid Mishna clearly states that the Rambam agrees that forgiving interest in advance doesn’t permit the loan. Otherwise that would undo the prohibition of interest. </ref>
| |
|
| |
| ==Mechila in Advance==
| |
| #It is forbidden to take a loan in order to pay back interest as a gift even though it is a willing and intentional gift. <ref>The Geonim cited by Rambam Malveh Vloveh 4:13 argue that obviously it is forbidden to give interest as even though one forgives it knowingly because that is every case of interest and yet it is forbidden. The Maggid Mishna points out that the Rambam agrees with the Geonim on this contention. Rosh b”m 5:2 agrees as well. Shulchan Aruch Y.D. 161:6 codifies this opinion.
| |
| * Yet, the Mishna Lemelech 4:13 writes that it is permitted to forgive paying the interest in advance for rabbinic loans and that is permitted. His proof is that the Gemara Bava Metsia 75a and Rambam 4:9 permit rabbis to lend with interest since it is understood to be a complete gift and the Maggid Mishna says that it isn’t stipulated interest but interest after the fact. However, Shach 160:6 rules based on the Tur that it is forbidden to give interest even as a gift even if it isn’t stipulated in advance.</ref>
| |
| # It is ineffective and forbidden to arrange in advance that someone will pay you interest and then forgive the interest so that it shouldn’t need to be returned.<ref>Bedek Habayit 160:5 cites that Ritva 61 a.s. Ma who writes that if a person forces his borrower to swear that after the loan he will forgive the interest because a forced mechila isn’t valid.</ref>
| |
| ==Mechila After the Fact==
| |
| # If a person incorrectly took interest one should return it but if the borrower forgives the loan (mechila) the lender doesn’t need to return it.<ref>Shulchan Aruch YD 160:5, Rambam 4:13 argues with the Geonim who held that mechila enver worked for ribbit and the Rambam holds that it is worked after the fact.</ref>
| |
| # If a person forced the borrower to swear that he would forgive the interest after he paid it, that is forbidden to give and take interest and the vow is in invalid.<ref>Ritva Bava Metsia 61a s.v. ma, Bedek Habayit 160:5</ref>
| |
| # The mechila has to be explicit and can’t be assumed by the lender since the borrower didn’t ask he forgave it.<ref>Pitchei Teshuva 160:1 citing Yavetz 1:147</ref>
| |
| # Ideally instead of having the borrower forgive the interest the lender should really return the interest to fulfill the mitzvah of returning interest.<ref>Chelkat Binyamin 130:35 writes that if the borrower forgives the interest the lender didn’t fulfill the mitzvah, though he is exempt. Rather the lender should pay the borrower.</ref>
| |
|
| |
| ==Matana Al Menat Lehachzir==
| |
| #If the borrower gives the lender a temporary gift that will later be returned in addition to the capital that is considered ribbit.<ref>Rama 160:5</ref>
| |
|
| |
| ==Small Amounts==
| |
| # It is forbidden to gift interest even in small quantities.<ref>Rama 160:17 only permits giving interest in small amounts for Talmidei Chachamim on occasion but not everyone.</ref>
| |
| ==Talmidei Chachamim==
| |
| # A Talmid Chacham who borrowed from another Talmid Chacham food he can return him some more than he got up to a fifth since they are so careful about the halacha it is obvious that they are giving purely as a gift and not because of the loan.<ref>Gemara Bava Metsia 75a, Shulchan Aruch 160:17</ref>
| |
| #Some say that it is permitted for a Talmid Chacham to stipulate with another Talmid Chacham to pay him a little bit of interest since it is understood to be a pure gift and because of the loan. This leniency should be relied upon sparingly so that people don’t mistakenly extrapolate.<ref>Rama 161:17</ref>
| |
| #Who is a Talmid Chacham? Some say that he needs to be knowledgeable in most areas of the Talmud and can answer questions properly and extrapolate halachot from one area to another and is very scrupulous of the halacha. Some say that it is referring to a student of Torah who knows the laws.<ref>Biurim of Chelkat Binyamin</ref>
| |
| # It is unclear if the wife of a talmid chacham is afforded the status of a talmid chacham for this halacha.<ref>Biurim of Chelkat Binyamin</ref>
| |
|
| |
| ==Purchasing Futures of a Commodity (Poskin Al Hapeirot)==
| |
| # You can buy gourds that are small in the field when they’ll ripen even if the price is cheaper when you pay now.<ref>Tosfot 64a s.v. ma says that you could buy wine from the vineyard even though it isn’t produced yet as long as you don’t specify how much and just buy everything. Also once the grapes are small it is permitted to buy the wine that will be produced later. That’s similar to buying gourds when they ripen if they’re now small (64a). However, the Nemukei Yosef 43b disagrees on both points. It is forbidden to buy the wine from the vineyard even if you don’t specify an amount since it isn’t produced yet. Also, since no one buys unripe grapes even when they’re unripe it isn’t like they’re relevant to allow buying wine that is produced from them. However, gourds are sometimes sold unripe. Rama 173:10 accepts Nemukei Yosef.</ref>
| |
| # If you specify that if the price goes up then it is an investment and if it goes down it is a loan, that is invalid and is considered a loan with ribbit.<ref>Tosfot b"m 54a s.v iy explains that since a person accepted the achrayut of the money it is certainly a loan.</ref>
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|
| |
| ==Exchanging Favors==
| |
| #It is forbidden to ask your friend to work for you today and you’ll work for them at a later date if the second job is harder<ref>Shulchan Aruch 160:9, Chelkat Binyamin 160:80, Mishnat Ribbit 19:2, Brit Yehuda 11:1</ref> or the value of the second work is more than the first one.<ref>Chelkat Binyamin 19:80, Brit Yehuda 11:1</ref>
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| #For example, it is forbidden to ask your friend to give you a ride somewhere and next week you’ll give them a ride somewhere else that is further or would take more time.<ref>Mishnat Ribbit 19:3</ref>
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| #It is forbidden for someone to watch someone else’s children in exchange that they will watch your children at another time if watching your children is harder or it is for a longer period of time. <Ref>Mishnat Ribbit 19:3</ref>
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| #It is permitted to exchange jobs even if the second is harder if the jobs being done are for a partnership and the people in question are partners.<ref>Chatom Sofer YD 135, Brit Yehuda ch. 11 fnt. 1, Chelkat Binyamin 160:79, Mishnat Ribbit 19:6. The Chelkat Binyamin explains that the reason is that the first person isn’t working for the second person but rather they are working for the collective business. </ref>
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| # If one person asks his friend to build his sukkah with him in exchange for him helping his friend build his sukkah if the second one is harder it is forbidden.<ref>Mishnat Ribbit Biurim 19 fnt. 1</ref>
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| # It is forbidden for a teacher to arrange for someone to substitute for him in exchange for him doing the same for that person if the second job is more difficult or is worth more.<ref>Mishna Ribbit 19:3</ref>
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| # It is a dispute if isn’t clear if the second job will be harder or worth more than the first job if it is permitted to initiate such a deal. One should be strict.<ref>Rashi 75a and Tur 160:9 imply that even if it isn’t clear that the second job is harder it is still forbidden the transaction. Prisha 160:15 states this explicitly. However, Shulchan Aruch 160:9 implies it is permitted. Chelkat Binyamin 160:82 is strict.</ref>
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| ===Exchanging Loans===
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| # It is forbidden to trade loans because doing so is taking and paying the value of a loan.<ref>Rama 160:9 quotes the dispute of the rishonim if it is permitted to lend someone on condition that they lend you back afterwards. The Gra holds it is forbidden.</ref>
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| # If after someone lent you money, it is permitted to lend them back.<ref>The Chelkat Binyamin 160:90 cites the Graz who says that for rabbinic ribbit cases we can follow the rishonim who permitted trading one loan for another loan. Therefore, if after the setup of the loan it is permitted to lend them in return since that would only be rabbinic ribbit even if one gave cash in return after the setup of the loan.</ref>
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| # It is forbidden for a loan gamach to stipulate that only members who lent money to the gamach may borrow from it because doing so is like lending somemone in order to get back a loan. A rabbi should be consulted how to set up such a gamach.<ref>Mishnat Ribbit 4:12. See Maharsham Shik 157, Maharam Brisk 2:18, Dvar Avraham 3:22, Minchat Shlomo 2:68:14, Brit Yehuda 11 fnt. 13, Netivot Shalom 160:18.</ref>
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|
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| ===Leniencies===
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| # If there is no reason that one job should be done before the other one it is permitted since the exchange is a simple trade of favors and there is no intention to charge for the passage of time.<ref>Mishnat Ribbit 19 fnt. 1 s.v. umstimat writes that if the people arranging the agreement don’t care which job is first then it is clear that they aren’t charging one another interest for the passage of time for the vale of the first job. He cites this from the Kuntres Acharon Lkitzur Piskei Dinei Ribbit 8:4. He ends that Rav Shternbuch advised avoiding this by stating that one shouldn’t arrange it as an obligation.</ref>
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| # If the people making the arrangements aren’t careful to be exacting then it is permitted since it is just one doing a chesed for the other. For example, if neighbors watch each other’s children from time to time and they don’t meticulously calculate how many times they watch each other’s children it is permitted.<ref>Chelkat Binyamin 160:79, Mishnat Ribbit 19:3</ref>
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| # If the two people arranged to do each other’s jobs simultaneously there is no prohibition of ribbit at all.<ref>Chelkat Binyamin 160:81. This is also clearly implied by Rashi 75a s.v. aval, Tur and Shulchan Aruch 160:9.</ref>
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| # Some hold it is permitted if you don’t stipulate from the beginning that they would exchange favors as long as the difference between the difficulty or price of the favors isn't great.<Ref>Brit Yehuda 11:2 citing Gedulei Truma 3:24, Mishnat Ribbit 19:5</ref>
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|
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| ==Who can you take interest from?==
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| ===Non-Jews===
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| # It is permitted to lend to and borrow from non-Jews with interest.<ref>The Gemara Bava Metsia 70b states that it is permitted to charge non-Jews ribbit and there is only a rabbinic prohibition to do so. The reason the rabbis forbade it is that they didn’t want people to learn from the non-Jews by interacting with them too much. They only permitted it for a talmid chacham or someone who needs to make money to survive. This is codified by the Rambam and Rif. However, Tosfot 70b s.v. tashich writes that today we lend with interest to non-Jews for three reasons: 1) we follow the opinion that there’s no rabbinic prohibition to lend to non-Jews at all. 2) Due to the high taxes we have to charge non-Jews interest otherwise financially wouldn’t survive and it is considered necessary for our livelihood. 3) Really based on the reason of the prohibition it is prohibited to do any business with non-Jews and if we didn’t do that we wouldn’t survive. Meiri b”m 70b agrees with reason two. Tur YD 159:1 cites the last reason of Tosfot. Shulchan Aruch and Rama Y.D. 159:1 simply writes that nowadays it is permitted to lend non-Jews with interest.</ref>
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| #Nowadays in Israel it is forbidden to lend non-Jews money with interest since it is possible to do business with Jews exclusively. Yet it would be permitted in order to make a livelihood but not to make oneself wealthy.<ref>Netivot Shalom YD 159:1:16 writes that today in Israel since it is possible to do without lending non-Jews with interest it is unclear if it is permitted to do so nowadays. Additionally, Rav Moshe Halevi in Malveh Hashem 5:3 writes that Jews who live in Israel should be strict not to lend non-Jews with interest since it is possible to transact with Jews and be financially stable. He explains that none of the reasons of Tosfot apply today except that perhaps we don't hold that there's any prohibition which is rejected. Similarly, Rav Shlomo Mazuz in Kerem Shlomo 159:8 is strict. Rav Ovadia Yosef in Halichot Olam v. 8 p. 3 writes that we hold that as long as it is difficult to do business only to Jews it is permitted in accordance with Tosfot, however, we do not hold that once the gezerah stopped applying it is nullified completely.</ref> Some poskim are lenient even in Israel.<ref>Chut Shani 2:1 p. 39 writes that even nowadays it is permitted to lend a non-Jew with interest even though in Israel we can support ourselves without business to non-Jews. Since there is some business with non-Jews and non-religious Jews the leniencies are still relevant. Chelkat Binyamin 159:10 (written in America) is lenient in all cases.</ref>
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| # Even outside Israel one should be strict if one can.<ref>Chachmat Adam 130:6 writes that any honest man who could avoid taking interest from non-Jews should do so.</ref> Some say that for an impersonal bank it is permitted since one hardly interacts with the non-Jews.<ref> Chelkat Binyamin 159:1 s.v. vhaidna writes that one doesn’t have to be strict for the Chachmat Adam if one is lending to a bank and one only has to interact with them minimally.</ref>
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| #It is permitted to borrow with interest from non-Jews.<ref>Rambam Malveh Vloveh 5:2 explains that they never prohibited it lest one come to learn from their ways since it is normal for a borrower to avoid the lender and not learn from him. Meiri b”m 70b agrees. Chazon Ovadia Shabbat v. 1 p. 7 and Malveh Hashem 5:5 codify this as the halacha.</ref>
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|
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| ===Non-Religious Jew===
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| # It is permitted to lend to a non-religious Jew with interest if he was brought up religious and later became non-religious.<Ref>Shulchan Aruch 159:2</ref> Initially this should be avoided.<ref>Rama 159:2</ref>
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| # One may not lend a non-religious Jew who is raised as a non-religious Jew with interest.<reF>Shulchan Aruch and Rama 159:3 forbid lending with ribbit to someone who is a tinok shenishba. Gemara Shabbat 68b clarifies that a child who was captive among non-Jews (tinok shenishba) and didn't know about Shabbat is considered as though he sinned unintentionally. Brit Yehuda 30:12 agree. Rambam Mamrim 3:3 writes that the sons of the karaites who were brought up with the mistakes of their parents aren't considered minim but should be returned in teshuva. (Yet, see the manuscript editions which include another few words that alter the meaning of the Rambam.) Pirush Mishnayot Chullin 1:2 writes that someone who reject tenants of our faith are considered minim. However, someone who was born into a family and background with such thoughts aren't culpable and are similar to a tinok shenishba. Binyan Tzion Chadashot 23 posits that many of the non-religious Jews today are considered tinok shenishba since they're following the ways of their fathers.
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| * Chazon Ish YD 1:6 writes that once we try to teach him about the Orthodox ways and he turns it down he is considered to be a mumar. The amount of effort necessary to spend in trying to teach him is subjective and is left up to the judgement of the rabbis of each generation. Additionally, once he is aware of the Orthodox Jews and practices even without trying to teach him he can be considered a mumar. However, that too depends on how aware he was of the Orthodox Jews and to what degree and with what intensity his parents taught his otherwise. This is the basis for the dispute whether Karaites are mumarim. </ref> This applies to conservative and reform Jews today.<ref>Igrot Moshe 4:91:6, Chelkat Binyamin 159:22</ref>
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| # Some say that it is permitted to lend the Karaites with interest.<ref>Shulchan Aruch 159:3. Bet Yosef 159:3 cites the Pirush Mishnayot Chullin 1:2 where the Rambam says that karaites are like tinok shenishba and it is forbidden to lend them with interest. Bet Yosef points out that the Nemukei Yosef 42b quotes the Ri who says that anyone who once recognized Orthodox Jews isn’t a tinok shenishba disagrees with this Rambam. Shulchan Aruch follows the Rambam. However, the Shach 159:6 cites the Maharshal, Maharnach 113, Rash quoted by Mabit 1:38, Rav Betzalel 3 who are strict. Nekudat Hakesef he writes that the halacha on this matter is unresolved. Chelkat Binyamin 159:21 concludes with the Graz who is strict.</ref>
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|
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| ===Family Members===
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| # It is forbidden to charge interest even between a parent and child even if they aren’t Bar/Bat mitzvah even though it is understood to be a gift.<ref>The Gemara Bava Metsia 75a concludes that it is forbidden to charge your children interest because it is teaching them a bad lesson. That is also the opinion of Rambam Malveh Vloveh 4:8 and Shulchan Aruch 160:8. Why in fact isn’t it Biblically forbidden to charge your children interest irrelevant of the fact that it is teaching a bad lesson? Chelkat Binyamin cites three approaches as to why it is technically permitted. 1) It is certain that in the end you don’t collect it (Prisha 160:13). 2) We’re only about money that the father gave the child and is now taking it back as interest (Ritva 75a, Knesset Hagedola, Lechem Mishna 4:8). 3) It is understood that the person means to give a gift to his children as a pure gift that he would have done so even if they didn’t lend money (Taz 160:4).</ref> This applies both to a parent borrowing from a child and a child from a parent.<ref>Taz 160:4 based on Rambam</ref>
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|
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| ==Gifts or Favors from the Borrower==
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| #It is forbidden to give a gift or interest even before or after a loan from another Jew and certainly during the loan.<ref>Mishna Bava Metsia 75b, Shulchan Aruch YD 160:6</ref> If someone does so they violated avak ribbit.<ref>Shulchan Aruch YD 160:6, Shach 160:8. Bet Yosef 160:5 inquires whether giving a gift after the loan that was specified for the loan is considered a Biblical violation of ribbit or only rabbinic. He notes that the Rambam Malveh Vloveh 6:3 who writes that one only violates ribbit Biblically if it was specified at the time of the initial loan would think this is only rabbinic ribbit. See Bet Yosef 166:3 that perhaps Rashi holds it is Biblical.</ref>
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| ===Before or After the Loan===
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| # Some say that it is permitted to give a gift before or after the loan from another Jew if you don’t specify that it is because of the loan.<ref>Tur 160:6, Bet Yosef citing Rosh, Hagot Mordechai 433, Smak 260, and Rashi 73b s.v. achulei, Rama 160:6. Smag cited by Tur 160:6 makes a compromise to allow it if it is a small gift.</ref> However, others disagree.<ref>Rambam Malveh Uloveh 5:11, Shulchan Aruch 160:6</ref> Ashkenazim follow the first opinion and Sephardim the second.<ref>Laws of Ribbis p. 87 is lenient.</ref>
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| # All agree that it is forbidden if it is a large gift or if you specify it is because of the loan.<ref>Rama 160:6</ref> The determination of a large and small gift depends on the people and context. Any gift which people would understand is in gratitude<ref>Netivot Shalom 160:12 quotes the Machaneh Efraim 17 who says that if one gives a gift explicitly out of gratitude it is permitted, however, that is completely rejected by the Hagahot Ashri 5 and Rashba b"b 138b.</ref> for the loan is forbidden.<ref>Chelkat Binyamin 160:48</ref>
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| # Some say that everyone agrees if one’s intention is to give it because of the loan it is forbidden.<ref>Shach 160:10, Taz 160:3, Chelkat Binyamin 160:45</ref> However, there is an opinion that it is permitted if one doesn’t specify that it is for the loan.<ref>Chavot Daat 160:3 writes that even if one intends to give a gift in order to get a loan it is permitted as long as one doesn’t specify that it is for the loan. Pitchei Teshuva 160:7 cites this.</ref> For example, paying to be able to buy on credit is forbidden.<Ref>The Laws of Ribbis p. 87</ref>
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| # Some say that it is permitted to give a gift before or after the loan from another Jew if you usually give the lender such gifts.<ref>Tosfot 64b s.v. achal, Sefer Hatrumot 2:46:3:11, Rambam Malveh Uloveh 5:12, Bet Yosef 161:4</ref> It is permitted for a borrower to hand a tissue to the lender since it is a common courtesy.<ref>Laws of Ribbis p. 90</ref>
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| # If it is a long time after the loan it is permitted to give a gift that isn't because of the loan.<ref>Bet Yosef 160:6 proves from Tosfot Gittin 20b that it is permitted to give a gift to the lender a long time after the loan. Shach 160:10 agrees but adds that if one specifies that the gift is because of the loan it is forbidden even if it is a while later. Chelkat Binyamin 160:49 argues and concludes that there is what to rely upon to be lenient.</ref> This statue of limitations to gifts depends on the context. As long as it is clear that it is because of the loan it is forbidden, but once it isn't clear that it is because of the loan it is permitted.<ref>Chelkat Binyamin 160:49</ref>
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| # If the borrower and lender have become friends because of the loan and at this point in their relationship it would be normal to give such a gift for the friendship such as for a celebration and not because of the loan it is permitted. This is only permitted if it is clear that the gift is for the friendship and not the loan.<ref>Netivot Shalom 160:6:13:4</ref>
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|
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| ===Mitzvot===
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| # It is forbidden to teach one’s lender or his son Torah during the duration of the loan unless he did so regularly before the loan.<ref>Rambam Malveh Vloveh 5:12, Shulchan Aruch 160:10. See Chavot Daat 160 who writes that according to the Rashba responsa 799 it should be permitted to teach him Torah since the lender didn't gain any financial gain. Nonetheless, Chavot Daat explains that we follow the Rambam who holds that any expenditure of money or time of the borrower for the sake of the lender is forbidden.</ref>
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| # It is forbidden to do the pidyon haben of one's son with one's lender.<ref>Mishnat Ribbit 4:24 citing Ketav Sofer 146, Brit Yehuda 11 fnt 49. Mishnat Ribbit points out (based on S"A Y.D. 160:23) that this is forbidden even if the lender didn't stipulate in the beginning of the loan that the borrower must do the pidyon haben with him.</ref>
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| #It is forbidden to buy an honor in Shul for one's lender.<Ref>Shach 166:1</ref>
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|
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| ===Favors, Kind Gestures, and Saying Thank You (Ribbit Dvarim)===
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| # It is forbidden to give any benefit to the lender even a nice word or greeting them with a simple word hello can be forbidden if a person didn’t usually say hello before the loan and one is doing it because of the loan.<ref>Gemara Bava Metsia 75b, Shulchan Aruch Y.D. 160:11</ref> This is called Ribbit Devarim and is a rabbinically forbidden form of ribbit.<ref>Chelkat Binyamin 160:95</ref>
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| #Ribbit Devarim only applies during the duration of the loan and not before or afterwards.<ref>Rabbenu Yerucham Meisharim 8:1, Meyuchas LRitva Bava Metsia 68b s.v. visura, Radvaz 3:1060, Chelket Binyamin 160:99 and 95 citing Ran Ketubot 46a, Sefer Hatrumot 3:13, Shulchan Aruch 160:10</ref> Some say that even after the loan is repaid it is forbidden to thank someone for a loan explicitly because of the loan; also it is forbidden to flatter someone to give you a loan before the loan begins.<reF>Horah Brurah on 160:11 citing Shulchan Aruch Harav 160:9</ref>
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| # Thanking the lender is questionable if it is permitted since it is giving something to the lender in return for the loan in addition to the original loan. Some are lenient since it is a generally accepted custom to thank people for very small favors and so it is rude to do otherwise and if the entire expression of gratitude is minimal it is like it was normal to do beforehand.<ref>Chelkat Binyamin 160:108 presents reasons to be lenient since thanking someone for a loan is merely a sign of derech eretz and not in exchange for the loan. See there at length. Additionally, he cites Minchat Shlomo 1:27:1 and 2:68 based on Graz is strict.</ref>
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| #It is forbidden to write in a sefer thank you to someone who lent you money in order to publish a sefer.<ref>Igrot Moshe YD 1:80. There he permits writing that Hashem should bless the person since that is a mitzvah to publicize someone who does a mitzvah.</ref>
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| # it is forbidden for the lender to ask the borrower for any favor even something simple as alerting him when someone will come to a certain place.<ref>Mishna Bava Metsia 75b, Shulchan Aruch 160:12</ref>
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| # It is forbidden to ask the borrower to do something for you even if he would have done so anyway.<ref>Taz 160:5 in explaining the Rambam, Chelkat Binyamin 160:111. Rav Meir Akoka in Bnetivot Hahorah 10:24 p. 150 proves from the S"A 172:4, S"A 160:23, and Mabit 1:6 unlike the Taz. He applies the Taz to many examples including: lending money on condition that he stops smoking, he puts conditions on how he can spend the money properly, for a certain apartment, how the loan is repaid with check or cash. </ref>
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| # The borrower can’t go to the simcha (celebration) of the lender unless he would have done so anyway.<ref>Chelkat Binyamin 160:112</ref>
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|
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| ===Business Obligations Upon the Borrower===
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| # It is forbidden to lend money on condition that the borrower does business with him or someone else<ref>Chelkat Binyamin 160::249</ref> specifically. There is a doubt if it is Biblical interest or only rabbinic interest.<Ref>Shulchan Aruch YD 160:23. Taz 160:22 disagrees that it is certainly forbidden for a borrower to give trumah to a kohen lender since the lender is gaining but doing business with someone isn’t considered a gain since he is paying for a service. Nekudat Hakesef 160:23 writes that if the lender didn’t have a lot of business and this agreement gets him more business it is forbidden. Chelkat Binyamin 160:248 is strict for Shulchan Aruch certainly in a case of hiring a worker.</ref>
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| #If the lender has a job it is forbidden to stipulate that the borrower use the lender for his services whenever he needs that type of service.<ref>Shulchan Aruch 160:23</ref>
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| # If the borrower has a job it is forbidden to stipulate that the borrower do that job even for a fair price for the lender whenever the lender needs it.<ref>Chelkat Binyamin 246 writes that the Gra 167:1 compares it to S"A YD 160:23. Chelkat Binyamin writes that according to the second answer of the Shach it is permitted but we shouldn't follow that answer alone.</ref>
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| # If there is no stipulation it is nonetheless forbidden for the borrower to do business with the lender to hire him specifically.<ref>Rama 160:23</ref> If the reason one is hiring him isn't because of the loan but because he has a better deal or the like it is permitted.<ref>Chelkat Binyamin 160:253</ref>
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| # If the lender is poor it is forbidden for the borrower to give him charity aside from repaying the loan. If he would have given him charity anyway if not for the loan it is permitted.<ref>Chelkat Binyamin 160:254</ref>
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| # Many poskim say that it is forbidden for a seller to allow people to buy on credit only if they spend a certain amount. The reason is that having a minimum to buy on credit is like making a loan to the buyers on condition that they do more business with you.<ref>Mishnat Ribbit 4:34 cites Brit Yehuda 10:36 and Kuntres Acharon Lkitzur Dinei Ribbit 7:1 citing Rav Elyashiv and Rav Bronsdorfer as holding it is forbidden because this condition forces the buyer to spend more and that is like lending money on condition that someone does business specifically with you (S"A 160:23). However, Rav Nissim Karelitz, Rav Halberstaum (Refidato Zahav), and Rav Ben Tzion Abba Shaul (Parshat Ribbit 10:20) permit it since it isn't clear that the buyer is buying extra because of the loan. Also the merchant can have such a limit not to in order to create such a condition but to benefit his bigger customers. Rav Karelitz held practically one shouldn't do this because it is common that a buyer will come to pay and then realize that he doesn't have enough and then go back in order to reach the limit, which would be obvious that he is doing so for the loan.</ref>
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| # It is forbidden for the borrower give a lender a loan during or after the original loan unless he regularly did so previously because doing so is considered a favor to the lender. This is only an issue if the second loan is larger or for a longer period of time, otherwise some poskim hold that it is permitted to give the lender such a loan.<ref>Chelkat Binyamin 160:90 based on the Graz writes that for rabbinic questions of interest we follow the opinion that it is permitted to give a loan to one's lender.</ref>
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|
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| ===Following Instructions of the Lender===
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| #It is forbidden for the lender to tell the borrower that I will lend you on condition that you convince someone to give you a gift.<ref>Rabbenu Yerucham 1:8 cited by Bet Yosef 160:15 and codified by Shulchan Aruch 160:15.
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| * The Gra 160:31 explains that based on the principle of arev and eved kenani it is considered as though the money was given from that third party to the lender since it was given on his say so. Furthermore, since that gift was given by the agency of the borrower it is like he gave the gift to the lender.
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| * Taz 160:20 explains that it is forbidden since the lender has pleasure over the fact that people follow his instructions. Shach 160:8 seems to agree.</ref>
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| ===Paying When Debt Is Unclear===
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| # If the lender and borrower can't agree on the amount of the debt the borrower can pay the higher of the amounts. Ideally he should specify that it is a gift and not for the loan.<ref>Laws of Ribbis p. 88 citing Avnei Nezer CM 26, Brit Yehuda 5:35, Minchat Yitzchak 6:161, 9:88</ref>
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| ===Lender Benefiting from the Borrower's Property===
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| # It is forbidden for the lender to benefit from the borrower's property for the duration of the loan without the permission of the borrower. The reason is that it appears to the public<ref>Netivot Shalom 160:7:7 suggests that perhaps nowadays when many loans take place in private and it isn't public knowledge using the borrower's property without permission could be permitted. If the loan is only known to a few people and those people know that anyway there was a previous relationship between the lender and borrower the Netivot Shalom thinks that the Shach 166:1 would be lenient. </reF> as though the lender is only benefiting from the borrower's property because of the loan and as such the lender is taking interest.<ref>Tosfot b"m 64b s.v. aval, Rosh b"m 5:17, Rosh responsa 108:17, Shulchan Aruch Y.D. 160:7</ref>
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| # Before or after the loan it is permitted for the lender to benefit from the borrower's property if it is the type of item that he would have done so even if not for the loan.<ref>Chelkat Binyamin 160:57</ref>
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| # If the borrower before the loan regularly lent his property to the lender even without his permission then it is permitted to do so during the loan.<ref>Chelkat Binyamin 159:58 citing Graz n. 11. Netivot Shalom 160:7:5 argues based on the Rosh 9:8.</ref>
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| # If everyone regularly borrows this type of item without the permission of the owner then it is permitted for the lender to borrow that item since it doesn't appear as though he is benefiting from the borrower because of the loan.<ref>Chelkat Binyamin 160:58 based on Graz</ref>
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| # It is forbidden for the borrower to let the lender rent a house of his or that he rented for less than the fair rent.<ref>Ranach responsa 69 cited by Pitchei Teshuva 166:2</ref>
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| ===If Lender Benefited from the Borrower's Property===
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| # If someone lent money he may not let the lender use his house for free. If he does that is considered rabbinic interest. If the house is up for rent then the lender needs to return the value of the rent. If the house isn't for rent and the owner wouldn't rent it, some say that it needs to be returned, while others holds there's no obligation to return it.<ref>Shulchan Aruch YD 166:1 writes that it doesn't need to be returned like the Ramban, but also cites the Rambam who says it is rabbinic interest and needs to be returned.</ref>
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| # If someone stipulates that his borrower can use his property for free, if the house is usually rented out, that is Biblical interest and must be returned. Even if it isn't usually rented out it is still rabbinic interest and must be returned.<ref>Shulchan Aruch 166:2 cites both the opinion of the Rosh and not the Rambam who says it is always Biblical interest even if it isn't usually rented out.</ref>
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| # If the stipulation to use the borrower's property happened after the original loan but it happened when they decided to extend the loan, it is a dispute if it is Biblical interest.<Ref>Shulchan Aruch 166:2 cites the dispute between the Rambam that it is rabbinic interest and the Rashi that it is rabbinic.</ref>
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|
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| ===Hiring the Lender for a Job===
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| # It is forbidden to stipulate that you will lend me money and I'll hire you for a fair price because that is considered as though one is paying them for the loan. There is a dispute if this is Biblical or rabbinic interest.<ref>Maharam (kirmona edition, responsa 257), Rama Y.D. 166:3. Chelkat Binyamin 160:43 writes that the Maharam writes that it is Biblical interest, while the Rama 166:3 implies it is only rabbinic interest. He concludes that it is an unresolved dispute.</ref>
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| # It is forbidden to lend money to someone and in the same situation be hired by him for a fare price because that appears to be interest. However, it is permitted if it is done in two settings. Alternatively, it is permitted if the loan is given as a complete gift even though the borrower is likely to give the gift back.<ref>Rama 166:3, Chelkat Binyamin 166:45, Shulchan Aruch Y.D. 177:13</ref>
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| ==Arrangements of Loans Between Several Parties==
| |
| ===Lending A Non-Jew's Money to A Jew with Interest===
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| # If a person borrowed money from a non-Jew with interest it is forbidden to then lend that money to another Jew with interest.<ref>Shulchan Aruch Y.D. 168:1</ref>
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| # If a person borrowed money from a non-Jew with interest and then before he returns it another Jew wants that loan and is willing to pay the interest to the non-Jewish lender, one may only give that loan to the second Jew under one of two methods. Both of these methods free the first Jew from any financial relationship with the second Jew:
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| ## The non-Jew tells the first Jew to leave the money in a certain location and he will be exempt<ref>Although Shulchan Aruch 168:3 hold that it is sufficient for the non-Jew to state that you can leave the money in a certain location for the second Jew and it is understood that he is exempt from the loan obligation, Shach 168:7, Taz 168:3, and Gra 168:6 all hold that it is necessary to state so explicitly.</ref> and then the second Jew takes it from there.<ref>Shulchan Aruch Y.D. 168:3</ref>
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| ## The first Jew returns the money to the non-Jew and he then gives it to the second Jew. No words need to be spoken since it is understood that when the non-Jew took the money from the first Jew he was exempting him from his loan.<ref>Shulchan Aruch Y.D. 168:2</ref>
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| ## It isn't a solution for the non-Jew to simply tell the first Jew to hand the money over to the second Jew and he'll be exempt since that appears as though the two Jews lent money with interest.<ref>Shulchan Aruch Y.D. 168:1</ref>
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| ===Lending with Interest with a Non-Jewish Agent===
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| # A non-Jew who borrowed from a Jew and is ready to return the money, if he finds another Jew to borrow that money with interest can give it to him with interest. However, if the non-Jew brought the money to the lender Jew he can't lend it to another Jew since that considered a loan between the lender and the other Jew with interest. Obviously this is forbidden if the non-Jew actually gave the money back to the lender that the lender may not lend that money to a Jew with interest. Additionally it is forbidden if the non-Jew put the money on the ground for the other Jew to pick up and the lender stated that the non-Jew would be exempt once he placed the money on the ground. These are all considered Biblical interest.<ref>Gemara Bava Metsia 71b, Shulchan Aruch Y.D. 168:6</ref> However, if the non-Jew simply hands the money to the borrower Jew in the presence of the lender Jew, most rishonim hold that this is rabbinically forbidden since the non-Jew is an agent of the borrower. However, there is a minority opinion in the rishonim who allows this.<ref>Rashi Bava Metsia 71b s.v. v'im explains that the conclusion of the Gemara was that there is a concept of agency for two Jews to create a loan between them with interest. This is rabbinically forbidden. This is the opinion of the Rif, Ramban, Rashba, Ran, and Nemukei Yosef all cited by the Bet Yosef 168:6. The Rambam Malveh Vloveh 5:4 however holds it is Biblically forbidden. On the other hand, Rabbenu Tam held that the gemara backed out of that stringency and so it is permitted. Rosh responsa 108:11 ponders how someone could possibly rule like Rabbenu Tam when it seems that it is forbidden and Rabbenu Tam brought no proofs. Either way, there the Rosh rejects following Rabbenu Tam initially. He is aware of the practice of some people to follow Rabbenu Tam but he argues that it is incorrect and the lender could only accept the interest if he is unaware that the non-Jew is borrowing the money for the other Jew.</ref> The halacha is not to accept this minority opinion.<ref>Shulchan Aruch Y.D. 168:6 completely rejects Rabbenu Tam's opinion. Rama 168:5 and 7 cites Rabbenu Tam however he says that one should only follow that opinion where there is a minhag. Chelkat Binyamin 168:51 writes that we don't follow the Rabbenu Tam since it is a question of Biblical interest.</ref>
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| # It is forbidden for a Jew to arrange with a non-Jew to lend your money to him in order that he lend it to another Jew with interest.<ref>Rashba teshuva 3:243 writes that it is forbidden to lend your money to him in order that he lend it to another Jew with interest since that is a mere legal fiction and is considered taking interest. Also, there is a concept of shelichut for a non-Jew to be considered a shelichut for purposes of being strict. That is, the rabbis view this transaction as though the non-Jew is an agent of the Jews and it is a loan between two Jews. Shulchan Aruch Y.D. 168:5 rule like the Rashba. The Shach 168:10 points out that the Rama would agree as well. Malveh Hashem 1:5:12 agrees. However, the Netivot Shalom 168:5:5 argues at length that the Rama never accepted this approach of the Rashba who expanded the concept of legal fictions for ribbit. The entire concept of Rabbenu Tam who allowed having a non-Jewish agent to arrange the loan with interest or Rashi's opinion who allowed a Jewish agent to arrange the loan with interest, both of which are cited by the Rama indicate that he was not concerned with the expansions of the Rashba. This is further supported by the fact that the Rama 168:5 implies that the reason for Shulchan Aruch is completely other than the reason of making a legal fiction out of taking interest. Netivot Shalom brings sources that show that there's a fundamental dispute of how far reaching is prohibition of using legal loopholes in interest (haramat ribbit) between the Maharam and Rashba. Netivot Shalom 166:6:13 extends this discussion to that of using a heter iska and the Gra's opinion that it violates haramat ribbit.</ref> After the fact it is forbidden to take the interest since the non-Jewish agent is merely a ruse and it was really a loan with interest from a Jew.<ref>Netivot Shalom 168:5:6 explains that the haramat ribbit that the Rashba was discussing was because the real intention of the parties was to create a loan between the two Jews and so it is completely ribbit, which is forbidden even after the fact. However, the Malveh Hashem 1:5:12 writes that this haramat ribit of the Rashba is purely legal fiction that is valid, though it is forbidden to arrange. Therefore, if it was already collected certainly it doesn't need to be returned.</ref>
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| #If the lender didn't know about the fact that the borrower appointed the non-Jew to borrow for him from a Jew with interest he can keep the interest<ref>Shulchan Aruch Y.D. 168:7</ref> and some allow him to even collect the interest once it was arranged.<ref>
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| * Derisha 168:4 explains that it is absolutely forbidden for the lender to make the borrower pay the interest since it is forbidden for the borrower to pay it, however, it already happened then the lender can keep it.
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| * Shach 168:17 argues that it is permitted for the lender to make the borrower pay the interest since it was done without his knowledge and in such a case it isn't really forbidden for the borrower with respect to the lender. Chelkat Binyamin 168:55 and 57 rules like the Shach and explains that once the lender wasn't aware of the appointment of the non-Jew by the borrower it isn't forbidden for the borrower to pay the interest. The only aspect that was forbidden is the arrangement of the loan.
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| * Netivot Shalom 168:7:6 writes that the Teshuvat Ri doesn't imply like the Derisha at all. Netivot Shalom 168:7:6 reads the Bet Yosef in accordance with the Derisha. However, the Chelkat Binyamin (168 Tziyunim 136) argues that the Bet Yosef held like the Shach.</ref> Sephardim are more strict and only allow this completely after the fact that the interest was collected.<ref>Horah Brurah 168:31. There he mentions the idea that the Bet Yosef suggests which is if the lender doesn't know from witnesses that the borrower appointed the non-Jew to be his agent and the borrower himself since he didn't appoint the non-Jew then the lender could collect the interest. Horah Brurah concludes that one may only rely upon this after the fact.</ref>
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| # If a Jew told a non-Jew to borrow for him from another non-Jew with interest and he went and borrowed from a Jew with interest the borrower can even pay the interest.<ref>Mordechai b"m 337, Shulchan Aruch Y.D. 168:8. Shach 168:19 and Taz 168:9 argue that just like the lender can collect the interest the borrower can pay it. However, it appears from the Bet Yosef that only the lender can collect it but it is forbidden for the lender to collect it. Horah Brurah 168:34 follows the Shach and Taz that if the non-Jew didn't follow the orders of the borrower it is then permitted for both the lender and borrower to exchange the interest at the end.</ref>
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| ===Non-Jew borrowing with Interest from a Jew through a Jewish Agent===
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| # If a non-Jew asks a Jew to borrow for him from another Jew with interest the Jewish agent may do his job as long as he says clearly that he is borrowing with interest on behalf of a non-Jew or the transaction is happening in the presence of the non-Jew.<ref>Ran b"m 71b s.v. mahu, Nemukei Yosef 42a, Hagaot Ashri 5:42, Rosh responsa 108:5, Raavan 103, and Smak 260 all cited by Bet Yosef 168:13. Baal Hatrumot 46:4:10 citing Ramban b"m 71b s.v. vgoy explains that even though the Jewish agent can't halachically become the agent of the non-Jew since there's no agency for non-Jews, the Jewish agent can be the agent of the lender.</ref>
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|
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| ===Lending with Interest with a Non-Jewish Agent using a Security Deposit===
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| [[Image:Taking Mashkon from Non-Jew.png|300px|right]]
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| [[Image:Returning Mashkon to Non-Jew.png| 350px| right]]
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| # Some permit borrowing from a non-Jew with a security deposit so that they can in turn borrow with interest from another Jew with that security deposit. This is permitted since the non-Jew takes responsibility for the original loan and it is treated as two loans and not one. Ashkenazim can rely on this opinion.<ref>Ri cited by Rosh b"m 5:55, Rosh responsa 108:11, Rama 168:8 seems to support this approach. Darkei Moshe 168:4 quotes the Mordechai and Hagahot Ashri who held that it is permitted even initially. Darkei Moshe 168:9 cites the Kol Bo 84 and Hagahot Maimoniyot Malveh 5:3 who says that the minhag was like the Ri</ref> Others hold that generally this is forbidden to arrange but if one explicitly tells the non-Jew that he has responsibility for the loan then it is permitted.<ref>Ramban b"m 71b s.v. vbar cited by Tur 168:9, Rashba 7:321, Nemukei Yosef 42a, Talmidei Harashba, and Baal Hatrumot 46:4:10 cited by Bet Yosef 168:9</ref>
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| # Even according to the strict opinion, a lender to a non-Jew with interest who collected a deposit from him which came originally from a Jew can collect the interest as long as he isn't certain that it was arranged improperly.<ref>Ri, Rosh, Shulchan Aruch 168:9</ref> Some say that he may not collect the interest if he knew that it was a Jewish security deposit such as if it is a Jewish article of clothing.<ref>Tur 189:9, Shulchan Aruch 168:9. Bet Yosef 168:9 s.v. yisrael shnatan notes that the Mordechai 338 held within the opinion of Rabbenu Tam that it doesn't matter whether the deposit was clearly Jewish or not.</ref>
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| # If the original Jew wants to get his security deposit back from the other Jew who lent to the non-Jew and the non-Jew isn't cooperating, the lender Jew doesn't need to work with the borrower Jew since they didn't have any transaction one to another.<ref>Rosh responsa 108:8, Rama 168:9</ref>
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| # If a Jew has a security deposit of a non-Jew in his hands and the non-Jew direct him to use it to borrow from another Jew with interest on his behalf, the first Jew may do so.<ref>Mordechai 337 writes that a Jew can use a non-Jew's security deposit to borrow from a Jew with interest if he is instructed so by the non-Jew. The Mordechai seems to apply this even to the case where the Jew didn't have the non-Jew's deposit but instead wanted to gift him a deposit of his own for its value. The Bet Yosef is troubled by this leniency since there's no mechanism by which the non-Jew is actually acquiring the deposit. Taz 168:14 gives a nuanced explanation that it was sold to the second Jew with a condition that the non-Jew could buy it back. Bach 168:13 and Nekudat Hakesef 168:11 explain that once a owner admits to the fact someone else owns his item it halachically belongs to that person (''kinyan odita'') and that is sufficient to remove the prohibition of ribbit. Either way, the Rama 169:11 concludes that we assume that it is impossible to gift a deposit to a non-Jew without him making a physical [[kinyan]] such as meshicha.</ref>
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| ====Non-Jew Selling Jewish Debt====
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| #If a Jew owed a non-Jew capital and interest, that non-Jew can sell that debt to another Jew. If the non-Jew collects the interest it is permitted for the Jew to accept it, yet if he doesn't then the second Jew shouldn't collect the interest from the first Jew.<ref>Rashba responsa 1:764 cited by Darkei Moshe 168:6</ref>
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| ====Jew Selling Non-Jewish Debt====
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| # If a Jew lent a non-Jew with interest upon a security deposit of the non-Jew. Then the non-Jew sold the security deposit to another Jew and he was told to pay the debt to the first Jew and collect the security deposit. This transaction is totally permitted since the loan was made between the Jew and non-Jew and then there was a sale of the non-Jewish debt to a Jew.<ref>Rosh responsa 108:25, Shulchan Aruch 168:12</ref>
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| #However, if the Jew who bought the debt then didn't pay off the debt immediately in order to redeem the deposit and only paid it after some time, thereby accruing a further interest charge upon the non-Jewish lender, the non-Jew may pay that interest charge to the Jewish lender even if the non-Jew in turn forces the Jewish buyer to pay him for that interest charge. But the Jewish buyer may not pay the interest to the Jewish lender because that would paying interest.<ref>Rosh responsa 108:25, Shulchan Aruch 168:12</ref>
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| ====When the Deposit was Taken Forcibly====
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| # If a non-Jew took a security deposit from a Jew forcibly and then used it to borrow with interest from another Jew, that second jew may collect interest from the non-Jew but may not collect interest from the first Jew.<ref>Smak 260, Kol Bo 84, Mordechai 338 citing Riva, Baal Hatrumot 7:46:10 all quoted by the Bet Yosef 168:10</ref> Some disagree and allow collecting the interest.<ref>Rosh cited by Tur 168:10</ref>
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| # However, under the following two circumstances one may collect the interest according to everyone:
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| ##If the force and responsibility of the loan rests upon the non-Jew besides for the security deposit then it is permitted to collect the interest from the first Jew.<ref>Bet Yosef 168:10 based on the Baal Hatrumot</ref>
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| ##Additionally, if the first Jew didn't know that his security deposit was going to be used to borrow from a Jew with interest it isn't any question of interest for him to pay the second Jew the interest to redeem his item.<ref>Maharik 16 cited by Bet Yosef 168:10</ref>
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|
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| ===Interest Gifted to A Jew or Non-Jew===
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| # It is forbidden to lend another Jew money in order that he give the interest to a non-Jew.<ref>Shulchan Aruch Y.D. 168:1</ref>
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| # It is permitted for a Jew to borrow from a non-Jew even if afterwards the non-Jew gives the interest to a Jew.<ref>Shulchan Aruch Y.D. 168:4</ref>
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|
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| ==Paying for the Fees and Other Losses of the Lender==
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| # It is forbidden for the borrower to pay for a loss than the lender incurred because the borrower didn't pay back on time. This includes a loss of profits<ref>Rashba 3:227 writes that it is forbidden to pay for the loss of profits of the lender, otherwise no ribbit would be forbidden.</ref> and a loss if he had to take out an interest loan from a non-Jew.<ref>Chelkat Binyamin 161:8. See Shevet Halevi 9:172 who forbids paying for lost profits but permits paying for interest payments the lender made to a non-Jew since that is considered like a damage he incurred because of the borrower.</ref> For example, if one Jew borrows another Jew's credit card and doesn't pay back on time if the credit card owner ends up paying the interest to the credit card company the borrower may not repay that interest to the lender.<ref>Laws of Interest 4:5 p. 79</ref>
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| # It is permitted for the borrower to pay for the writing of the contract, even for a part investment which is also for the benefit of the lender, for the security of the loan, and for the fee of extracting the money from the bank if the lender wasn't also doing it for himself.<ref>Chelkat Binyamin 161:8</ref>
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| # For example, if the lender is penalized by the bank for taking out his money early from an investment (such as a CD) in order to lend that money the borrower can pay for that fee.<ref>Chelkat Binyamin 161:8. Laws of Interest p. 82 fnt. 16 cites Rabbi J. David Bleich who argues.</ref> This applies specifically if he lost some of the capital or he already acquired interest and is now penalized, however, if he didn't yet acquire the interest the borrower may not pay for that loss.<ref>Laws of Interest 4:9 p. 81</ref>
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| # A gamach which charges a fee for a loan in order to ensure the upkeep of the gamach is a question but some permit it, yet it is better to do so without stipulating that it be paid. Either way the fee shouldn't be dependent on the amount of the loan.<ref>Chelkat Binyamin 161:8</ref>
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| # It is forbidden to pay the lender for his time and effort even if it meant he took off from work to arrange this.<ref>Laws of Interest 4:2, p. 79</ref>
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|
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| ==Taking a Loan only to Benefit the Lender==
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| # If someone takes a loan only for the benefit of the lender it is permitted for the borrower to let the lender benefit from the borrower's property. For example, if someone doesn't need a house and does a favor to the poor contractor and instructs him to build it and he'll be paid for his expenses. Additionally the contractor can live in the house afterwards for free. That is considered permitted even though the lender is benefiting from the lender's property since it isn't considered a loan at all but a nice deed of the borrower.<ref>Rif responsa 102, Sefer Hatrumot 4:26, Rama 166:3, Brit Yehuda 2:20</ref>
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| # Some poskim allow someone who wants to benefit a poor person or a talmid chacham to take a loan for him on interest. If that borrower makes money he needs to pay it entirely to the lender. Since he is doing it as a favor to the lender it isn't interest.<ref>Brit Yehuda 2:20. However, Chelkat Binyamin 166:3 biurim mi takes another approach based on the Levush that limits the Rama's leniency to where no money of the borrower enters the hands of the lender.</ref>
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|
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| ==Annuity==
| |
| #It is forbidden to give a gift to someone on condition that they give you a small gift each year (or regularly) for an extended period of time such that the accumulation of the gifts is more than the original gift. Essentially an annuity using gifts is forbidden.<Ref>Pitchei Teshuva 160:5 writes that the Teshuva Mahava 1:54-58 has a series of teshuvot about whether it is forbidden to give a gift in order to get back a greater gift broken up over time. Originally he held it was only rabbinic ribbit but finally concluded it was ribbit. Sheilat Yavetz also writes that such a setup is ribbit. However, the Knesset Hagedola holds that it is permitted.</ref>
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|
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| ==Payments from a Third Party to Create a Loan==
| |
| # It is permitted to give someone money in order that they lend money to someone else.<ref>Gemara Bava Metsia 69b</ref> That is only permitted on condition that the giver isn’t reimbursed by the borrower. Furthermore, the borrower can’t tell the lender that the giver is giving on his behalf.<ref>Rosh b”m 5:47 holds that it is necessary to have 3 conditions in order for someone to give a gift to a lender. 1) the giver isn’t reimbursed by the borrower, 2) the borrower can’t tell the lender that he should lend him because of that gift, and 3) the borrower can’t initiate to have someone give a gift to the lender. The Ramban b”m 69b s.v. shari disagrees with condition 3 since ultimately the money isn’t given from the borrower it is permitted. Additionally, it is clear that the Ramban forbade asking an agent to give a gift for him. Ritva 69b s.v. amar accepts the Ramban that it is permitted to convince the giver to give the gift and he even allows the borrower to reimburse the giver since the giver gave it on his own. Shulchan Aruch Y.D. 160:13 accepts the Ramban but still insists that the first two conditions are necessary. Pitchei Teshuva 160:9 quotes the Mishna Lmelech Malveh 5:14 and Shaar Hamelech who think that according to the Ramban the second condition isn’t necessary. Chelkat Binyamin 160:128 quotes a dispute about this point and is lenient only in an extenuating circumstance as Shulchan Aruch implies that this second condition is absolutely necessary.</ref>
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| # Some poskim add that the borrower may not convince the giver to give a gift to the lender.<ref>The Rosh Bava Metsia 5:47 held it is forbidden for someone to ask someone to give a gift to someone in order that they lend for them since doing so makes the giver into an agent of the borrower. However, the Ramban 69b s.v. shari disagrees. Since the borrower isn’t paying for this gift and the money is coming from a third party it is considered as though the money wasn’t given from the borrower to the lender and is permitted. Rashba 69b s.v. ha writes that the Raavad held like the Rosh and the Ramban argued. Shulchan Aruch 160:13 follows the Ramban but cites the Rosh as an individual opinion.</ref> There is what to rely upon to be lenient.<ref>Shulchan Aruch 160:13 follows the Ramban as he does he writes in the Bet Yosef that since it is only rabbinic one can be lenient. Shach 160:18 cites this. Chelkat Binyamin 160:126 agrees. See however Pitchei Teshuva 160:9 who cites the Gedulei Trumah that this dispute is about a Biblical question. </ref>
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| # It is certainly forbidden to hire someone to get someone to lend you money and that hired agent pays the lender some of that money.<ref>Taz 160:7</ref>
| |
| ===Gifts between the Borrower and a Guarantor===
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| # A borrower who accepts to pay his guarantor some amount of money each month or period of time it isn’t considered interest since it isn’t a payment from the borrower to the lender. This is permitted unless the lender set up the loan in order to get the borrower to pay the guarantor.<ref>Pitchei Teshuva 160:10 citing the Chavot Yair 190</ref>
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|
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| ==Payments from a Borrower to a Third Party==
| |
| #It is forbidden to ask a borrower to pay back anything in excess of the capital to someone else or a tzedaka. That is considered Biblical ribbit.<ref>Tosfot Bava Metsia 71b s.v. maso writes that it is obviously forbidden to have the borrower pay someone else for the loan since that is like he paid the original lender based on the principle of arev. An arev is a guarantor who is indebted because money was paid to someone else based on his word, similarly, the interest is being paid to the third party based on the agreement of the lender. This is true even if the third party isn’t Jewish. Bet Yosef 160:14 cites the Haghot Ashri 5:47, Rabbenu Yerucham 1:8 27b, Mordechai b”m 327-328, Ran responsa 29:7 who agree.</ref> If the third party already took the money the lender needs to return to the borrower the amount of that gift to the third party since he caused interest to be given.<ref>Mordechai b”m 327-328 clarifies that since giving the interest to a third party is Biblical interest it must be returned by the lender. This is cited by the Shach 160:19. Even though the Pitchei Teshuva 160:11 quotes that Rabbi Akiva Eiger wasn’t sure about this, Chelkat Binyamin p. 78 clarifies that it was only the questioner to Rabbi Eiger who wasn’t sure but Rabbi Eiger certainly would accept the Shach. </ref>
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| #It doesn’t matter if the lender initiated this stipulation or the borrower initiated the stipulation and the lender agreed to lend on that condition.<Ref>Rama 160:14</ref>
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| ===Payments to a Third Party to Create a Loan===
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| # It is permitted to pay a third party in order that he encourage someone to lend you money since the recipient of the payment isn’t the lender.<ref>Gemara Bava Metsia 69b, Shulchan Aruch 308:16</ref>
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| # This third party could be anyone besides a close family member such as a financially dependant child of the lender.<ref>Shulchan Aruch 308:16. Taz 160:10 adds that a child even if they’re not financially dependant on the father it is forbidden to pay them since it is like paying the lender themselves. Shach 160:21 agrees. Pitchei Teshuva 160:12 cites the Lechem Rav who says that paying a husband to encourage his wife to lend him is forbidden since they are financially connected.</ref>
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| # It is forbidden for this recipient to give the money to the lender.<ref>Rama 160:16 writes that it is forbidden for the recipient of the money to give it to the lender since it is like a scheme of how to pay interest.</ref>
| |
| ===Gifts between the Guarantor and the Lender===
| |
| # If the guarantor or anyone else accepts to pay the lender some amount of money each month or some period of time as long as the borrower hasn’t paid that is considered interest.<ref>Taz 160:6</ref>
| |
| ===Paying up a Loan of the Lender===
| |
| # It is rabbinically forbidden for the borrower to repay another loan of the lender if he does so besides returning the capital of the loan that he borrowed.<ref>Radvaz 3:1060, Chavot Daat 160:5. Radvaz points out that this is different that the laws of someone who one took a [[neder]] not to benefit since paying their loans isn't a benefit.</ref>
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|
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| ==Non-Profits==
| |
| #Money that belongs to orphans who aren’t bar or bat mitzvahed can be lent with rabbinic interest<ref>Gemara Bava Metsia 70a concludes that it is only permitted to lend money of orphans as interest if the interest is only rabbinic but not if it is Biblical. This is accepted by the poskim and Shulchan Aruch Y.D. 160:18.</ref> but not Biblical interest.<ref>Although it was clear from the Bavli Bava Metsia 70a it is forbidden to lend money of orphans with Biblical interest, the Maharil responsa 73 cites a practice to do so and justifies it based on the Yerushalmi Sanhedrin 7. However, the Maharil concludes that the practice is completely invalid and should not be followed. The Rama 160:18 cites the maharil that this practice was completely rejected. Shach 160:27 adds that there’s no such practice any more as it was wrong. See Yabia Omer YD 5:13 who cites many rishonim who did explain that the yerushalmi held it was permitted. </ref> This is the practice.<ref>Even though the Shach 160:19 writes that the practice was not to lend orphan’s money with any interest even rabbinic interest, the Nodeh Byehuda YD 40 writes that the practice is completely justified based on the majority of rishonim and Shulchan Aruch. He testified that he did so personally. Pitchei Teshuva 160:20 cites the Nodeh Beyehuda. Chelkat Binyamin 160:200 agreed.</ref>
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| # The is permitted to collect the rabbinic interest even if it is collected after he is bar or bat mitzvahed as long as it was arranged beforehand.<Ref>Pitchei Teshuva 160:23 citign Mishna Lemelech</ref>
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| # If the orphan’s money was indeed lent with Biblical interest, if the borrower invested and in fact made as much as the percent interest that was demanded he needs to pay it.<ref>Shulchan Aruch Y.D. 160:19. The Rashba responsa 2:174 writes that if the orphan’s money was lent with Biblical interest it must be returned like any case of interest. However, the Maharil responsa 37 tries very hard to allow the orphans to keep it. The Maharam prague edition 969 has another justification.</ref> Some say that he only needs to pay it if he made twice as much as was demanded.<ref>The Bet Yosef 160:19 writes that even according to the Mordechai 332 and Maharam’s leniency that we view the loan with interest as though it was an investment (iska) that is permitted it is at most viewed as an iska transaction. Therefore, since in an iska half of the profits go to the investor the orphans only deserve have of the profits made up to the amount of the percent that they demanded. However, the Mahara Sason 162 argues that the lender has to pay all of his profits to the orphans and not just half. The Shach 160:32, Chachmat Adam 130:10, and Chelkat Binyamin 160:215 cite this dispute and do not offer any resolution.</ref>
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| # Money that is designated for talmud torah, poor people, or a shul can be lent with rabbinic interest.<ref>Shulchan Aruch 160:18. The Rosh, Tur, Rabbenu Yerucham, and Rashba apply the leniency of lending orphan’s money with rabbinic interest to other cases of mitzvah such as talmud torah. The Shulchan Aruch codifies this opinion.</ref>
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| # Some say that it is permitted to lend money with rabbinic interest in order to have money to spend on a Shabbat meal or Suedat mitzvah.<ref>Pitchei Teshuva 160:22 citing the Bear Yakov, Yalkut Yosef 253:4</ref>
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| # This leniency does not apply to money designated for a tzedaka unless it was given to a charity and is in the domain of the charity.<ref>Chelkat Binyamin 160:195 based on Mishna Lmelech</ref>
| |
| # Charity that is designated for an individual poor person can be lent with rabbinic interest.<ref>Chelkat Binyamin 160:196 quotes the Bet Yosef within the Rashba says that lending charity with rabbinic interest is only permitted if the money isn’t yet designated for one poor person. However, the achronim hold that it is permitted as long is it is designated for the poor and even an individual.</ref>
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| # Can you lend money with rabbinic interest to spend that money for a mitzvah? Some poskim hold that it is forbidden,<ref>Mishna Brurah (Shaar Hatziyun 242:15)</ref> while others hold it is permitted.<ref>Chazon Ovadia Shabbat v. 1 p. 9 writes that it is permitted to lend money with rabbinic interest in order to spend it for a Shabbat meal or seudat mitzvah. This is based on the Magen Avraham 242:2 who says that it is permitted to lend with interest in order to spend for a Shabbat meal.
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| * Yerushalmi Sanhedrin 8;2 establishes that it is permitted to lend with interest in order to have money for a meal of a mitzvah such to establish the kiddush hachodesh. Shibolei Haleket 55 applies this also to Shabbat meals. What type of interest is permitted for a mitzvah? Or Zaruah Tzedaka 30 explains that even Biblical interest is permitted to further a mitzvah. Mordechai b”m 287 cites Rabbenu Shmuel who agrees. This opinion is cited in the Aguda b”m 4:73, Maharil 37, and Hagahot Maimoniyot (kushta edition, malveh 4). Mahara Ben Tauba cited in Tashbetz 34 agreed. However, this opinion is rejected by the overwhelming majority of poskim as is evidenced by Bet Yosef 160:18.
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| * Maharam (krimnoa edition 109) holds that it is forbidden to lend money for charity with Biblical interest but it is permitted to lend them with rabbinic interest. This is also the opinion of the Rosh responsa 18:8, Rashba responsa 4:232, Shulchan Aruch 160:18, and Gra 160:43. Radvaz 6:2306 writes that everyone holds that rabbinic interest is permitted for charity.
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| * Magen Avraham 242:2 cites the Shibolei Haleket that it is permitted to lend with interest for a Shabbat meal. The Netiv Chaim explains that this means borrowing with interest from a non-Jew. However, Rav Ovadia (Chazon Ovadia Shabbat v. 1 p. 7) argues that there is no prohibition to borrow from a non-Jews with interest (Rambam Malveh 5:2). Shulchan Aruch Harav 242:9, Rav Shlomo Kluger in Chachmat Shlomo 242, Kinyan Torah 7:20, Bear Yakov 242 cited by Pitchei Teshuva 160:22, and Chazon Ovadia all hold that it is permitted to lend with rabbinic interest in order to get money for the meals of Shabbat. Shevet Halevi 2:64:1, 8:189 seems also to support this opinion.</ref>
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| # If a power of attorney or agent lent money of orphans with interest on their behalf and they already took that money the power of attorney or agent doesn’t need to pay it back and the orphans as well can keep it.<ref>Shulchan Aruch 160:20</ref>
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| ==Ribbit for Pikuach Nefesh==
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| #It is permitted to borrow from a Jew with interest in order to save someone’s life. That is only if borrowing from a non-Jew with interest isn’t an option that would allow saving the person’s life. <ref>
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| * Shulchan Aruch Y.D. 160:22 writes that it is permitted to borrow with interest in order to save someone’s life. Taz 160:21 is bothered what is the point since it is obvious that it is permitted to violate any sin (besides idolatry, illicit relations, and murder). Bet Lechem Yehuda writes that it is permitted to borrow with interest from a Jew even if a non-Jew is available but it’ll take longer and in order to save time one can borrow from the Jew if it is quicker and could impact saving the person.
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| * Why does pikuach nefesh allow violating lifnei iver? Shulchan Aruch O.C. 306:14 rules that in order to protect someone from getting involved with a great sin it is permitted to sin a small sin, even if that involves violating Shabbat. If so we see that it is like pikuach nefesh to save someone from spiritual destruction. Why then is it permitted to cause someone sin in order to save someone else?
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| * Tosfot Shabbat 4a s.v. vchi writes that the principle that one could save someone else from sinning by sinning oneself doesn’t apply if they entered the situation by negligence. This is codified by the poskim such as Magen Avraham 306:28 and Mishna Brurah 306:56. Rabbi Baruch Pesach Mendelson (Bet Yitzchak v. 39 p. 730 explained that there is no mitzvah of arvut when the person got into the situation of sin by his own negligence. Therefore, it is forbidden to save him from sin by sinning yourself.
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| * Eretz Tzvi 2:20 writes that violating Shabbat to save someone from a violation of Shabbat isn't pikuach nefesh. Otherwise the gemara Shabbat 4a wouldn't have had a safek about this. Also, Tosfot 4a says that we wouldn't violate Shabbat if he was negligent but if it really was pikuach nefesh we would violate Shabbat even if he was negligent to become sick. </ref> The lender is doing wrong by lending with interest but nonetheless one doesn’t need to worry about causing him to sin if one is trying to save someone’s life.<ref>Taz 160:21 writes that it is obvious that the lender with interest is doing wrong and really he has an obligation to spend in order to save the person.</ref>
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| ==Taking a Loan from an Israeli Bank==
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| # It is permitted to take a loan from an Israeli bank account since there is a heter iska klali. It is preferable to write on the contract that it works with a heter iska.<ref>Yalkut Yosef Sova Semachot v. 1 p. 517 writes that it is permitted to take an interest loan from the Israeli banks. Here are his reasons:
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| * The Israeli banks were set up with a heter iska klali. Even so it is preferable to say that it is done according to the heter iska. Tzemech Tzedek YD 88 writes that you should write the contract uses a heter iska and not just say it otherwise it is a haarama. Simchat Cohen 7:96 and Yalkut Yosef describe how Rav Shmuel Salant set up the Israeli banks with a heter iska. To rely on the heter iska the person taking the loan should have to use it for business and not for debt or needs. Graz Ribbit n. 42 writes that a loan with a heter iska that is spent for something other than a business is prohibited. Har Hakarmel 25 agrees. Shoel Umeishiv 3:160 allows using the loan for something else since as a result of the loan one is able to make money with another business. Maharsham 2:216 agreed. Imrei Yosher 1:108 argued with the Shoel Umeishiv based on Teshuvot Maimon in Bet Yosef 177. Teshurat Shay 88 agrees. Maharshag YD 1:5 argued that a heter iska klali is ineffective unless you state it specifically.
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| * the corporation of the bank has a limited liability for individual owners and as such there's no loan between two people but between a corporation and an individual. Rashba responsa 1:669 entertained the idea that there's no ribbit with money designated for charity that doesn't belong to any individual. Maharit 45, Har Tzvi YD 126, Tzafnat Pane'ach 184, Bet Avi 3:129:6, Maharia Halevi 2:54, and Cheshev Haefod 53 are lenient. are also lenient. See Minchat Shlomo 1:28, Minchat Yitzchak 3:1:2-3, Chelkat Yakov 3:160, and Chayei Halevi 2:54. Igrot Moshe 2:62 writes that there's no ribbit for a corporation to pay interest like in a savings bank but there is when discussing an individual paying a corporation.
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| * According to Rashi (cited by Rama 160:16) that there’s no prohibition of ribbit when done through a shaliach perhaps that can permit using a bank loan since the teller is merely an agent of the bank.</ref>
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| ==Merchant Cash Advance==
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| #It is forbidden to be a broker for Merchant Cash Advance transactions since halacha deems them as a loan with interest. A heter iska can be used to solve the issue.<ref>[http://dinonline.org/2019/11/27/mca-broker/ dinonline.org] points out that even Rav Moshe’s leniency of corporations wouldn’t apply since there is usually a personal guarantee or COJ attached to the contract. Therefore without a heter iska it is forbidden to be a broker for these transactions.</ref>
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| ==Links== | | ==Links== |
| # [http://www.yutorah.org/lectures/lecture.cfm/826799/Rabbi_Hershel_Schachter/Ribbis Ribbis] by Rabbi Hershel Schachter | | # [http://www.yutorah.org/lectures/lecture.cfm/826799/Rabbi_Hershel_Schachter/Ribbis Ribbis] by Rabbi Hershel Schachter |
| # [http://www.yutorah.org/lectures/lecture.cfm/773692/Rabbi_Yona_Reiss/Contemporary_Issues_in_Hilchos_Ribbis Contemporary Issues in Hilchos Ribbis] by Rabbi Yona Reiss | | # [http://www.yutorah.org/lectures/lecture.cfm/773692/Rabbi_Yona_Reiss/Contemporary_Issues_in_Hilchos_Ribbis Contemporary Issues in Hilchos Ribbis] by Rabbi Yona Reiss |
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| ==Sources==
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| <references/>
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| [[Category:Ribbit]]
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