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Interest-Free Loans

Interest-Free Loans

The greatest form of charity


Granting an interest-free loan is not just nice, it’s a mitzvah (Exodus 22:24). For how much? As much as the borrower needs, as much as you can afford. If he needs and asks, and you turn him down, his cries are heard on high—and that’s dangerous stuff. On the other hand, give him that loan and “you shall call and G‑d will answer; you shall cry and He will say, ‘Here I am’” (Isaiah 58:9).

Lending money interest-free is the highest form of tzedakah (charity), far greater than giving free handouts. A handout may preserve a life for a day, but a loan preserves that sense of self-sufficiency necessary to get back on your feet. That’s why every Jewish community is expected to support at least one interest-free loan society.

Unlike tzedakah, free loans are for both the poor and the richWhat if someone is not needy, but would like a loan to make more money? Perhaps not as great, but still a mitzvah. Unlike tzedakah, free loans are for both the poor and the rich.

Some important details:

  • Don’t grant the loan if you believe that the money will be squandered and the borrower won’t have the means to repay.
  • It is expressly forbidden for two Jews to transact a loan that involves any form of interest whatsoever. If the loan is for business purposes, a halachic contract can be drawn up that makes the lender a partner in the business, thus entitling him to some of the profits. Speak to a rabbi to facilitate this procedure.
  • Don’t press a debtor if you know that he is unable to repay the debt. Don’t even appear before him, even without making any demands, lest he be frightened or shamed.
  • On Sabbatical years, all loans are voided. Click here to learn how to avoid being voided.
  • No loan should be made without either witnesses or a written contract.
Illustrations by Yehuda Lang. To view more artwork by this artist, click here.
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Discussion (44)
October 1, 2016
Job search
I don't want to get a loan. I need prayers in finding a job.
February 5, 2016
What a wonderful practice. Why can't the rest of the world do it this way?
Thank you for this reading.
May 22, 2015
What about inflation?
What about inflation? If you lend $1,000, and when you get it back it costs $1200 to buy the same things you could buy for $1000 when the loan was made, are you allowed to charge $1200 and still call it an interest-free loan?
Maurice M Mizrahi
September 8, 2014
Interest free
It is so hard to find someone willing to donate that much money interest free! Right now my mother is in desperate need of help to pay for medical treatment. Me and my sister have been going from bank to bank seeing how much they will charge for interest.

I'm praying and hoping for a miracle here!
May 8, 2014
money lender
My great grandmother was an interest free loan lender. She was a seamstress who came from Sicily and who was a Russo and was a hidden jew from the Spanish inquisition days. Apparently she knew about this mitzvah. Our family always spoke about her good nature and generosity.
February 13, 2014
interest free loan to Pauline N. Nowroth
Pauline N. Nawroth
If I understand correctly , you just bought companionship,
As for the others on this site when we do encounter legitimate desperate ones what would you do? Do you think about to help or not ? How far would you go helping with money, lets say you do have money to do so ?
Question to Chabad why to expose people problems here ? It is one think to talk about loans , free interest on this site . Chabad do you ever think that people may know here each other .... just from reading the postings , regardless it is a anonymous.
Ontario Canada
February 10, 2014
.....Giving a Loan
It has finally dawned on me.....I will not worry about the monies I have put out for a gentleman I care for. Now I know your next question and my answer is: I wanted and needed his companionship and I got it. Also, if I did not have the funds I gave him, I would have never given it nor would I have had his companionship. It is not easy to admit one has made a mistake, but I am willing to live with it in hopes of a small but satisfactory ending will come about. Now it is a verbal promise and time alone will tell. You see, I have patience and am willing to wait it out.
Pauline N. Nawroth
February 9, 2014
transfer your credit card debt
The idea of a free loan isn't so you can transfer your credit card debt to an interest free source. It is to help people who have dire need for survival. -WRONG.
An interest free loan is for anyone who agrees to pay it back as per the rules at the top of the page.
And....the law of the Shemitah still applies.
Blessed are those who give and follow the word of HaShem. The promise to be blessed is written in the Torah. It is beyond spreadsheets.

You have to trust in HaShem, follow his ways.
Test it for yourself.
January 28, 2014
I recently got married and had no money to pay for the essentials, my wife had no money as she is a young girl from a poor household and most of the wedding expenses fell on my shoulders. With faith in God that everything will be okay we scheduled our wedding date and got married. On the day of my wedding I ran around without a head worrying how I am going to pay for the wedding, that feeling of helplessness and loneliness will never be forgotten, what should be the most beautiful day of my life was for me the most worrisome day and night of my life, my smile was not real and my cries under the chupa most definitely was. I tried calling gemachs but was unable to get what I needed. At this point I am in my first year of marriage and I am still struggling with paying off the costs of my wedding, the constant worries and sleepless nights of financial stress is truly getting to me and definitely not helping in the harmony of my marriage. If anyone knows of a gemach that could help me out and take my stress away I would really appreciate if you could lead me in the right direction.
January 19, 2014
Interest free loan to charity of your choice.
The idea of an interest free loan is to pay off high-interest credit card debt. It's to pay off anything or buy anything. Jews should not pay interest.
I invite anyone to join me in creating a charity loan setup in association with your Synagogue or charity.
The money would be made available as per rules listed in Chabad, to members of your Synagogue.
Payment plan goes to the Synagogue or charity.
The idea is the lender is giving to charity, let the money reside in a borrower first, then the borrower pays the charity.
Lender obtains the mitzvah, borrower enjoys benefits from HaShem.
Charity gets a donation. Everyone wins. Tikum Olam.
Wisdom of the Torah.
San Diego, CA