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Taking Interest: Difference between revisions
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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> | 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> | ||
==Basics== | ==Basics== | ||
# 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 | # 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> | ||
# 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> | # 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> | ||
# 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> | # 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> | ||
# 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> | # 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> | ||
==Rabbinic Prohibition of Interest== | ==Rabbinic Prohibition of Interest== | ||
# 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> | # 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> | ||
==Discounts== | |||
# 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</ref> | |||
# 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> | |||
==Partnership of Jews and non-Jews== | ==Partnership of Jews and non-Jews== | ||
# 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> | # 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> | ||
