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Taking Interest: Difference between revisions
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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> | # A loan document with interest can be used to collect the capital and not the interest.<ref>Shulchan Aruch 161:11</ref> | ||
# 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> | # 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> | ||
==Discounts== | ==Discounts== | ||
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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> | # 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> | ||
# 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> | # 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> | ||
===Buying on Credit when the Price is Unclear=== | |||
'''''Tarsha''''' | |||
# 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> | |||
# 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> | |||
# 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> | |||
This section isn't finished. | |||
#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. | |||
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? | |||
Bear hagolah and tiferet lmoshe - peiro will have a shuma later but parah will never | |||
Shach - parah is yatzah shaar in that the factors necessary to determine its price like per pound is shaar kavuah | |||
Taz argues on rama and says its only if it didn’t go up | |||
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 | |||
Rav chaim in gemara and tos not rama - with ashray bmata that’s partially yesh lo | |||
==Partnership of Jews and non-Jews== | ==Partnership of Jews and non-Jews== | ||
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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 </ref></p> | <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 </ref></p> | ||
==Lending Commodities for Other Commodities== | ==Lending Commodities for Other Commodities== | ||
# It is rabbinically forbidden to lend items for the same quantity of that item.<ref>Shulchan Aruch 160:21</ref> | # It is rabbinically forbidden to lend items for the same quantity of that item.<ref>Shulchan Aruch 160:21. | ||
Why is it only rabbinic interest to lend commodities? | |||
*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. | |||
*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> | |||
# 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>Shulchan Aruch YD 160:21</ref> | # 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>Shulchan Aruch YD 160:21</ref> | ||
# 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> [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] cites Torat Ribbit 17: | # 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> | ||
# 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> | |||
# 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> | |||
# 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> | |||
===Yesh Lo=== | |||
# 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> | |||
# 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> | |||
# 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> | |||
# 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> | |||
# 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> | |||
===Yatza Hashaar=== | |||
# 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> | |||
# 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> | |||
# 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> | |||
# 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> | |||
# 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> | |||
===One Commodity for Another Commodity=== | |||
# 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> | |||
#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> | |||
===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> | |||
# 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> | |||
===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> | |||
# 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> | |||
# 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> | |||
# 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> | |||
# 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> | |||
# 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)].</ref> | |||
===Lending Commodities as Part of a Work Contract=== | |||
# 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> | |||
# 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> | |||
==Involvement with Interest== | ==Involvement with Interest== | ||
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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> | # 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> | ||
== | ==Foreign Currency== | ||
# 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> | |||
====Fiat Money (Chartalism)==== | |||
# 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. | |||
# 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 6:61, 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.</ref> | |||
# 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> | |||
====Commodity Money (Metallism)==== | |||
# 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> | |||
# 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: | |||
## 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> | |||
## 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> | |||
# 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> | |||
# 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> | |||
==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> | |||
# 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> | |||
# 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 | # 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== | ==Judging by the Time of Stipulation== | ||
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# 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> | # 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> | ||
== | =="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> | # 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> | ||
# There is no time limit to be considered a loan, even a loan for a moment is a loan and is subject to interest.<ref>Laws of Ribbit p. 116 citing Brit Yehuda 2:3</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> | |||
==Repaying Interest== | ==Repaying Interest== | ||
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===Non-Jews=== | ===Non-Jews=== | ||
# 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> | # 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> | ||
#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.</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> | #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> | ||
# 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> | # 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> | ||
#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> | #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> | ||
===Non-Religious Jew=== | ===Non-Religious Jew=== | ||
# 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> | # 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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===Favors, Kind Gestures, and Saying Thank You (Ribbit Dvarim)=== | ===Favors, Kind Gestures, and Saying Thank You (Ribbit Dvarim)=== | ||
# 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> | # 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> | ||
#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 160:95 citing Ran Ketubot 46a, Sefer Hatrumot 3:13</ref> | #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> | ||
# 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> | # 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> | ||
#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> | #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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# 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> | # 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> | ||
# 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> | # 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> | ||
# 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> | |||
===Following Instructions of the Lender=== | ===Following Instructions of the Lender=== | ||
