Categories of Ribbit

From Halachipedia

Lending money on interest is one of the more severe prohibitions in the torah. [1] The lender, the borrower, the guarantor, the witnesses, and even the scribe violate when engaging in an interest-bearing loan. [2]

Basics

  1. 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. [3]
  2. It is prohibited to lend with interest even if the borrower is wealthy and willingly agrees to pay the interest. [4] 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. [5]
  3. 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. [6]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) [7] or if one is unsure how much one borrowed one may return an amount to be sure the loan is repaid. [8]
  4. 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.[9]
  5. 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.[10]
  6. There is no prohibition of ribbit upon the borrower whenever it is rabbinic ribbit.[11]

Rentals

  1. It is forbidden to charge interest for a rental.[12]
  2. If someone got money not as a loan or as a deposit to safegaurd but because of theft or as a debt of rental or wages, even though one can't charge interest, if the one who is obligated to pay wants to pay more he can do so. However, some forbid in all cases.[13]
  3. There is a dispute if money returned due to a erroneous sale is considered like a loan for the purposes of interest.[14]

Worker's Salary

  1. It is forbidden to charge interest for wages of a worker.[15]

Lending an Object

  1. 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.[16]

Rabbinic Prohibition of Interest

  1. 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. [17] Additionally, one who receives biblical interest must return it but this does not apply to certain cases of rabbinic interest. [18]
  2. 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.[19]

Involvement with Interest

  1. Anyone involved in the interest transaction, such as the lender, buyer, witnesses, scribe, or another intermediary is violating the halacha of ribbit.[20]
  2. It is forbidden to give a gift when returning a loan when if one doesn’t specify that it is because of the loan.[21]

Legal Subterfuge

  1. 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.[22]
  2. 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.[23]
  3. 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.[24]
  4. If the borrower never took the commodity but everything was transacted orally it is considered rabbinic interest in all circumstances.[25]
  5. If the borrower stipulated with the lender that they would go through with this entire series of transactions it is certainly interest.[26]
  6. There is a dispute if it is permitted if the borrower only sells the commodity back to the lender at another time.[27]

Renting a Field to a Borrower

  1. 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.[28]
  2. If the entire series of transactions were stipulated from the beginning it is certainly forbidden.[29]
  3. 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.[30]
  4. It is permitted to sell a field to someone and then rent it from them.[31]

Judging by the Time of Stipulation

  1. 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.[32]
  2. 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.[33]

Land or Documents

  1. 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.[34]
  2. Ribbit applies to money given in a document.[35]

Mitzvot

  1. Regarding leniencies for taking interest for a Mitzvah see Corporations_and_Partnerships#Non-Profits

Ribbit for Pikuach Nefesh

  1. 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. [36] 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.[37]

Mechila in Advance

  1. 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. [38]
  2. 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.[39]
  3. Regarding Mechila after the fact see Returning Interest That Was Wrongly Collected#Mechila After the Fact

Matana Al Menat Lehachzir

  1. If the borrower gives the lender a temporary gift that will later be returned in addition to the capital that is considered ribbit.[40]

Taking a Loan only to Benefit the Lender

  1. 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.[41]
  2. 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.[42]

Sources

  1. ↑ 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.
  2. ↑ Mishna Bava Metzia 75b. Shulchan Aruch Y.D. 160:1
  3. ↑ Shulchan Aruch 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.
  4. ↑ Shulchan Aruch YD 160:1,4.
  5. ↑ Iggerot Moshe YD 3:93
  6. ↑ The Weekly Halachah Discussion (vol 2, pg 348) quoting The Laws of Interest (pg 35)
  7. ↑ The Weekly Halachah Discussion (vol 2, pg 348) quoting Brit Yehuda (Siman 17 note 6)
  8. ↑ The Weekly Halachah Discussion (vol 2, pg 348) quoting Sh”t Minchat Yitzchak 9:88
  9. ↑ Rabbi Doniel Neustadt on torah.org and [dinonline.org http://www.dinonline.org/2014/01/17/receiving-points-from-credit-card-loan/]
  10. ↑ 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.
  11. ↑ Nemukei Yosef b”m 39b s.v. garsinan, Ritva there, Darkei Moshe 160:2, Rama 160:1
  12. ↑ 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.
  13. ↑ Brit Yehuda 2:17. He explains that Rabbi Eliezer Mtuch holds that there is no prohibition of interest when it was a case of a rental or wage. The Bet Yosef end of 160 rejects this opinion as does the Shach. However, the Bach 161 accepts it as a legitimate opinion. The Maharashdam YD 222 cited by Brit Yehuda claims that there's only a dispute if the one who deserves the rent or wage charges the interest but if the one who has the money decides to give extra that is permitted. Masat Binyamin 37 agrees. Brit Yehuda follows that opinion.
  14. ↑ Chatom Sofer YD 85 and Maharam Shik YD 161 dispute whether money that was taken because of a sale and then the sale falls through whether it is like a loan and it is permitted to pay interest or not. Maharshag 1:4 argues with the Maharam Shik.
  15. ↑ Gemara Bava Metsia 73a clarifies that there is interest for hiring a worker. Bet Yosef 160:21 clearly states this as well.
  16. ↑ Mishnat Ribbit 4:35 based on Chavot Daat 161:1
  17. ↑ Shulchan Aruch and Rama YD 160:18
  18. ↑ Shulchan Aruch YD 161:2
  19. ↑ 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.
  20. ↑ Bava Metsia 75b, Tur and Shulchan 160:1, Shach 160:1
  21. ↑ 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.
  22. ↑ Bava Metsia 62b, Shulchan Aruch Y.D. 163:3
  23. ↑ Shulchan Aruch and Rama 163:3
  24. ↑ Taz 163:6
  25. ↑ Shach 163:6
  26. ↑ Rama 163:3. Rama implies it is Biblical interest while the Bach cited by Shach 163:11 explains that it is only rabbinic interest.
  27. ↑ 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.
  28. ↑ 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.
  29. ↑ Rama 164:1
  30. ↑ Shulchan Aruch 163:2
  31. ↑ Shulchan Aruch 164:3
  32. ↑ Gemara Bava Metsia 60b, Shulchan Aruch Y.D. 160:21
  33. ↑ 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.
  34. ↑ 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.
  35. ↑ 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.
  36. ↑
    • 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.
    • 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?
    • 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.
    • 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.
  37. ↑ 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.
  38. ↑ 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.
  39. ↑ 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.
  40. ↑ Rama 160:5
  41. ↑ Rif responsa 102, Sefer Hatrumot 4:26, Rama 166:3, Brit Yehuda 2:20
  42. ↑ Brit Yehuda 2:20. However, Chelkat Binyamin 166:3 biurim s.v. 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.
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