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Taking Interest: Difference between revisions
From Halachipedia
→Judging by the Time of Stipulation
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# 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> | # 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> | |||
===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== | ||
# 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 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> | ||
