Rambam - 3 Chapters a Day

Neshech and marbit are one and the same, as Leviticus 25:37 states: "Do not give him your money with neshech and do not put forth your food at marbit." And further on, Deuteronomy 23:20 speaks of: "Neshech from money, neshech from food, neshech from any substance that will accrue."

Why is interest called neshech? Because it bites. It causes pain to one's colleague and consumes his flesh. Why did the Torah refer to it with two terms? So that one would commit a twofold transgression when violating this prohibition.

Just as it is forbidden to give a loan at interest; so, too, it is forbidden to borrow at interest, as Deuteronomy, ibid., states: "Do not offer interest to your brother." According to the Oral Tradition, we learned that this is a warning to the borrower.

Similarly, it is forbidden to act as a broker between the borrower and the lender when interest is involved. Anyone involved, a guarantor, a scribe or a witness transgresses a negative commandment, as Exodus 22:24 states: "Do not lay interest upon him." This is a warning against the witnesses, the guarantor and the scribe.

Thus, we see that a person who offers a loan at interest violates six prohibitions:

"Do not act like a creditor toward him," "Do not give him your money with neshech" "Do not put forth your food at marbit" "Do not take neshech and tarbit from him" (Leviticus 25:36), "Do not lay interest upon him," and "Do not place a stumbling block in front of the blind" (Leviticus 19:14).

A person who borrows at interest violates two prohibitions: "Do not offer interest to your brother." "Do not place a stumbling block in front of the blind"

The guarantor, the witnesses and the like violate only the prohibition: "Do not lay interest upon him." Any broker who connects between the lender and the borrower or assists or instructs one of them with regard to making the loan transgresses the commandment: "Do not place a stumbling block in front of the blind"

Although the lender and the borrower violate all the negative commandments mentioned above, they are not punished with lashes, because the interest must be returned. For whenever a person gives a loan at interest, if fixed interest is involved, it is forbidden by Scriptural Law and may be expropriated through legal process. The judges expropriate it from the lender and return it to the borrower. If the lender dies, it is not expropriated from his children's possessions.

When a father leaves his sons money obtained by taking interest, they are not obligated to return it, even though they know that it was obtained through interest. If, however, he leaves them a cow, a garment or any other specific article obtained through interest, they are obligated to return it as an expression of honor for their father.

When does the above apply? When their father repented, but was not able to return the article before he died. If, however, he did not repent, the sons need not be concerned with his honor. They are not required to return even a specific article.

When robbers and people who lend money at interest seek to return the money they took, we should not receive it from them. This will make the path of teshuvah more accessible to them. Whoever accepts repayment from them is not looked upon favorably by our Sages. If, however, the stolen article itself was intact or a specific article was given as interest, and it itself is there, it may be accepted.

When interest - whether fixed interest or interest forbidden by Rabbinic law - is mentioned in a promissory note, the lender may collect the principal, but not the interest. If he collected the entire amount, any fixed interest can be expropriated from him. "The shade of interest" - i.e., interest forbidden by Rabbinic law - may not be collected from the borrower by the lender, nor is it expropriated by the court from the lender for the borrower.

Whenever a person writes a promissory note that includes interest, it is as if he documents and has witnesses testify that he denies God, the Lord of Israel. Similarly, whenever a person borrows or lends money at interest in privacy he denies God, the Lord of Israel, and denies the exodus from Egypt, as Leviticus 25:37-38 states: "Do not give him your money with neshech... I am God your Lord, who took you out of the land of Egypt."

It is forbidden for a person to borrow money from his sons or the members of his household at interest. This is forbidden even when he is not tightfisted and he is merely giving them a present. The rationale is that in doing so, he might habituate them to this practice.

When Torah scholars lend money to one another and the borrower returns more than the amount loaned him, it is permitted. It is obvious that the extra amount was only a present that he gave him. For they know the severity of the prohibition against taking interest.

The following laws apply when a person lends money to a colleague, and the borrower discovers more than the sum originally agreed upon, or the borrower returned a debt and the lender discovers more than the sum that was borrowed. If the additional amount was a sum about which a person might easily err, it must be returned. If not, we can assume that the borrower gave the lender a present, he had stolen property belonging to the lender in his possession and sought to return it together in the account without the lender being aware, or another person asked him to return money in such a manner.

What can be considered a sum about which a person might easily err? One, two, five or ten more. The latter figures are included, for perhaps the person counted out the sum in groups of five or ten.

Similarly, if the person found that a group of five or a group of ten had an additional one, he must return the extra amount. Maybe an additional one with which he was counting became mixed with a group of five or ten.

The following laws apply when a person lends a colleague according to a particular coinage, or stipulates in his wife's ketubah that a sum should be paid to her in a particular coinage, and then the ruling authorities increase the weight of that coinage. When the value of produce was reduced because of the increase, he should deduct the proportion of the increase, even if the increase was minimal. If, however, the value of produce is not reduced because of the addition, he need not deduct that proportion. Instead, he should pay him the coin used as currency at that time.

When does the above apply? When the addition was one fifth of its value -e.g., its weight was four units and it was increased to five. If, however, more than a fifth was added, he should deduct the entire proportionate amount of the increase, even though the price of produce did not increase. Similar laws apply with regard to a loan when the weight of a coin was decreased.

The following rules apply when a person lends a colleague according to a particular coinage, and that coinage is disqualified by the ruling authorities. If the lender could use the disqualified coin as legal tender in another country, and the lender has a way of getting to that country, the borrower may repay him in the coinage that he lent him, telling him: "Go and use it in such and such a place." If the lender does not have a way of getting there, the borrower must repay him in the coinage that is legal tender at that time. Similar laws apply with regard to a ketubah.

Some of the Geonim have ruled that when a borrower forgoes the interest a lender charged or will charge on his behalf, his statements are of no consequence, even though he affirms his waiver with a kinyan or gives it as a present. Their rationale is that whenever interest is given, the borrower is waiving his rights. The Torah, however, does not accept this waiver and forbids it. Therefore, one cannot waive interest, even interest forbidden merely by Rabbinic Law on behalf of the lender.

It appears to me that this ruling is incorrect. Instead, since the lender is told to return the interest, and he knows that he violated a prohibition, and the borrower has the right to collect the money, if the borrower desires to waive the obligation to return the interest he may, just as a person may waive the return of a stolen article. Indeed, our Sages explicitly stated that when robbers and people who lent money at interest seek to return the money they took, we should not receive it from them. This indicates that the waiver of the obligation to return the interest is effective.

It is permitted to give property belonging to orphans to a faithful person who has valuable properties to offer as security, in an arrangement that is likely to lead to profit and unlikely to lead to loss.

What is implied? The court tells the person: "Do business with their property. If there is a profit, give them a portion of the profit. If there is a loss, suffer the loss yourself." This is "the shade of interest." Nevertheless, "the shade of interest" is forbidden only because of a Rabbinic decree, and our Sages did not apply their decree to property belonging to orphans.

One may lend money to and borrow money from a gentile and a resident alien at interest, as implied by Deuteronomy 23:20: "Do not offer interest to your brother." We may infer: Offering - and taking - interest from "your brother" is prohibited; from people at large, by contrast, it is permitted.

It is a positive mitzvah to lend money to a gentile at interest, as Ibid:21 states: "You may offer interest to a gentile." The Oral Tradition teaches that this is a positive commandment. This is the Scriptural Law.

Our Sages, however, forbade a Jew from lending money to a gentile at a fixed rate of interest beyond what is necessary for him to earn his livelihood. They enacted this decree lest the lender learn from the gentile's deeds as a result of the large extent of his contact with him. Therefore even according to the Sages, it is permitted to borrow money from a gentile at interest, for the Jew will flee from him, and will not frequent his company.

Torah scholars will not learn from a gentile's conduct. Hence, it is permitted for them to lend money to a gentile at interest, even to make a profit. Any transactions in the category of "the shade of interest" that involve gentiles are permitted for everyone.

The following law applies when a Jew borrowed money from a gentile at interest, and when he seeks to return it to him another Jew meets him and tells him: "Give it to me and I will pay you the rate of interest that you pay the gentile." This is forbidden, even if the original borrower brings the other Jew to the gentile. Instead, the gentile must take back his money and then give it as a loan to the other Jew.

When, by contrast, a gentile borrows money from a Jew at interest and desires to return it to him, and another Jew meets the gentile and tells him: "Give it to me and I will pay you the rate of interest that you pay the other Jew," this is permitted. If, however, the gentile brought the Jewish borrower to the Jewish lender and informed him of the loan, this is considered fixed interest, for he gave the money with the knowledge of the Jewish lender. This applies even if the gentile gave the Jewish borrower the money.

It is forbidden for a Jew to entrust his money to a gentile so that he can lend them to a Jew at interest.

When a gentile loans money to a Jew at interest, it is forbidden for another Jew to serve as a guarantor. The rationale is that according to their laws, the lender may demand payment from the guarantor first. Thus, after paying the debt, the guarantor will demand payment for the interest that he is obligated to the gentile. Hence, if the gentile makes a commitment not to demand payment from the guarantor first, it is permitted.

The following laws apply when a Jew borrowed money from a gentile at interest and then the gentile converted. If a reckoning was made before he converted, the convert may collect the principal and the interest. If a reckoning was not made until after he converted, the convert may collect the principal, but not the interest.

Different rules apply when, by contrast, a gentile borrows money from a Jew at interest and then converts. After a reckoning is made, even if it was made after the conversion, the convert is required to pay the entire sum, the principal and the interest. This measure was instituted lest people say that the person converted for the sake of his money. Even after he converted, the Jew can collect the entire sum of interest for which he became liable while he was a gentile.

It is a mitzvah to lend money to a Jew without charge before lending money to a gentile at interest.

It is forbidden for a person to invest his money in a manner where his share in the profit is great and his share in the eventuality of loss is minimal. This is considered "the shade of interest." A person who makes such investments is considered "wicked."

If a person makes such an investment, the profits and the losses are divided according to the laws governing a hetter iska. A person who invests his money in a manner where his share in the profit is minimal and his share in the eventuality of loss is great is considered pious.

We may not appoint a person as a storekeeper in return for half of the profits, nor may one entrust a person with money to buy produce in return for half of the profits, nor may one buy eggs to place under another person's chickens in return for half of the profits, nor may one evaluate calves and young donkeys and then have them fattened in return for half of the profits.

These arrangements are permitted only when the investor pays the manager a wage for his efforts and reimbursement for the upkeep of the animals, or grants the manager a greater share of the profits than his share in the event of a loss, as we explained with regard to partnerships.

When a person enters into a partnership arrangement with a colleague, entrusting him with money or with land, or making an iska agreement, he should not include the profit together with the principal as a single sum in the promissory note, lest there be no profit and this lead to interest.

Similarly, a person should not give a colleague money as an iska or in a partnership, but have a promissory note written as if it were a loan. This is prohibited lest he die and the promissory note be given to his heir, who will use it to collect interest.

It is forbidden to pay interest before taking a loan or to pay it afterwards. What is implied? If a person thought about receiving a loan from a colleague and sent him presents so that he would grant him the loan, this is considered to be paying interest before giving a loan. If he took a loan from him and returned the debt, and then sent the lender a present for the fact that his money was in his possession without his receiving any benefit, this is considered as paying interest afterwards. If one transgresses and does this, this is "the shade of interest."

When a person who borrowed money from a colleague would not ordinarily greet him first, it is forbidden for him to greet him first. Needless to say, it is forbidden for him to praise the lender in public or go to his home. These prohibitions are derived from the phrase Deuteronomy 23:20: "All types of neshech"; even words are forbidden.

Similarly, it is forbidden for the borrower to teach the lender Scripture or Talmud throughout the duration of the loan if the borrower was not accustomed to doing so previously, as implied by the phrase: "All types of interest."

When a person lends money to a colleague, he should not tell the borrower: "Take notice if so and so from this and this place comes." Implied is that the borrower should honor him and provide him with food and drink as is appropriate. Similar laws apply in all analogous situations.

There are practices that resemble interest, but which are permitted. What is implied? A person may purchase a promissory note from a colleague for less than its face value without any concern. A person may give a colleague a dinar so that he will lend a third party 100 dinarim. The rationale is that the Torah forbade only interest given by the borrower to the lender.

Similarly, a person may tell a colleague: "Here is a dinar. Tell so and so to give me a loan." This is permitted, because he gave him a wage only for making the suggestion.

There are certain matters that are permitted, and yet are forbidden because they are ha'aramat ribit (a circumvention of the prohibition against interest).

What is implied? The borrower tells the lender: "Lend me a maneh." The lender answers: "I do not have a maneh. I have wheat worth a maneh," and he gave him the wheat for a maneh and then purchased it from him for 90 zuz. This is permitted, but it was forbidden by the Sages as a circumvention of the prohibition against interest. For he gave him 90 and received a maneh.

If the lender transgressed and carried out these transactions, the lender may expropriate 100 zuz from the borrower through legal process, because even "the shade of interest" is not involved. Similarly, if a field was given as security for a loan, the lender may not rent it back to the owner of the field, because this is a circumvention of the prohibition against interest. For the borrower is receiving the field that he owned and paying the lender rent each month because he lent him money.

It is forbidden to hire out dinarim. This does not resemble hiring out other utensils. In the latter case, the same utensil that was hired out is returned, In this instance, however, the recipient spends the dinarim he receives and pays him back with others. Hence, "the shade of interest" is involved.

The following rules apply when a king has established a law that whoever pays the head tax imposed on every person for a particular person has the right to take control of that person and treat him as a serf. If a person pays a dinar as the tax for a particular person and then has him work for more than a dinar, this is permitted. Similar principles apply in all analogous situations.

Whenever a person gives a loan to a colleague of a sela for five dinarim, two se'ah of wheat for three, a selah for a selah and a se'ah or three se'ah for three se'ah and a dinar, it is forbidden. The general principle is whenever there is a stipulation that any increase be made to a loan, interest forbidden by Scriptural Law is involved, and it may be expropriated from the lender through legal process.

Similarly, when a person lends money to a colleague and makes a stipulation that he can live in the borrower's courtyard at no cost until he returns the loan, he rented the borrower's property for less than its fair value and established that this reduction would remain in force until he repaid the debt, or took as security property from which benefit can be derived at the time of the loan - e.g., the borrower gave the lender his courtyard as security with the intent that the lender dwell in it without charge - all the above are forms of interest forbidden by Scriptural Law and it may be expropriated from the lender through legal process.

Similarly, when a person sells a field or a courtyard through an asmachta, since the purchaser does not acquire the field itself, any produce that he consumes is interest and must be returned. Similar laws apply to any person who has [completed a transaction that is] not fully binding at the outset. He must return all the produce. For if he consumes the produce, he will be taking interest according to Scriptural Law.

Any other matter forbidden as interest outside the above categories is prohibited by Rabbinic decree. These decrees were enforced lest this lead to the violation of interest forbidden by Scriptural Law. Interest forbidden by the Rabbis is called "the shade of interest" and may not be expropriated from the lender through legal process.

When a person lends money to a colleague, he should not take that colleague's servant to perform work for him even if the servant is sitting idly. He should not dwell in his courtyard without charge, even though this courtyard is not fit to be rented out and the owner does not ordinarily rent out his property. If the lender does dwell in it, he must pay rent to the owner/borrower. If he does not pay rent, it is considered as "the shade of interest," because at the outset, he did not stipulate that if he makes the loan, he can dwell in his courtyard.

Therefore, the following rule applies if the borrower has not paid the debt and desires to deduct the rent for the courtyard in which the lender dwelled from the debt. If the rent is equivalent to the entire debt, he may not deduct the entire amount - only the sum that the judges specify. The rationale is that if the lender were sent away without receiving anything, it would be equivalent to expropriating the interest by the court. And "the shade of interest" is not expropriated by the court.

My teachers issued the following ruling when a person lends money to a colleague and afterwards demands payment of the debt. If the borrower tells the lender: "Dwell in my courtyard until I repay the debt," it is considered as "the shade of interest." The rationale is that this condition was not specified at the time the loan was given, as can be inferred from Leviticus 25:37: "Do not give him a loan with neshech."

The following rules apply when a person lends a colleague money and the borrower offers a field as security. Although the lender tells the borrower: "If you do not return the debt to me within three years, the field belongs to me," he does not acquire it. The rationale is that the agreement is an asmachta and an asmachta is not binding. Accordingly, the lender must deduct all the produce he consumed from the sum of the loan. For consuming that produce is interest forbidden by Scriptural Law.

Different rules apply, however, if the seller/borrower tells the lender/purchaser: "If I do not repay you within three years, acquire it retroactively from the present date." If the borrower brings the money to the lender within three years, the lender is not entitled to the produce. If he brings the money to the lender/purchaser after three years, all the produce belongs to the purchaser.

When a person sells a house or a field and tells the purchaser: "When I obtain money, return the property to me," the purchaser does not acquire the field. All the produce that he consumes is considered as fixed interest and can be expropriated from him through legal process.

If, however, on his own initiative, the purchaser tells the seller: "When you obtain money, I will return this field to you," it is permitted for him to do so. The purchaser may consume the produce until the seller returns his money.

The following laws apply when a person sells a field to a colleague and the purchaser pays a portion of the money to the seller. If the seller tells the purchaser: "Acquire a portion of the property in proportion to the percentage of your payment," each of them is entitled to consume a share of the produce proportional to the percentage of the property he owns.

If the seller tells the purchaser: "When you bring the remainder of the money, you will acquire the field retroactively to the present date," both of them are forbidden to benefit from the produce immediately. The seller is prohibited, lest the purchaser bring the remainder of the money and thus the field will belong to him from that date. Hence if the seller were to consume the produce, he would be receiving benefit from the money that the purchaser has yet to pay him.

Similarly, the purchaser is forbidden to benefit from the produce. The rationale is that perhaps he will not bring the remainder of the money and the transaction will be nullified. Thus, he will have benefited from the produce in consideration of the money he had given the seller. Therefore, the produce should be given to a third party until it is appropriate to give it to one of them.

If the seller tells the purchaser: "When you bring the remainder of the money, you will acquire the field," the seller is entitled to benefit from the produce until the purchaser brings the money. If the purchaser consumes the produce, its value should be expropriated from him.

If the seller tells the purchaser: "Acquire the field at present and the remainder of the money is considered as a debt," the purchaser should benefit from the produce. If the seller consumes the produce, everything that he consumed should be expropriated from him.

My masters ruled that the following principle applies when a person lends money to a colleague and the borrower gives the lender his field as security with the intent that the lender benefit from the produce while he was holding it as security. Even though the lender does not deduct anything, this is considered merely "the shade of interest," and cannot be expropriated from the lender through legal process.

The rationale is that giving a field as security is different from giving a house as security. Because produce is not located in the field at the time the loan is given. It is possible that the lender will profit, for produce will grow, and it is possible that he will lose when sowing and working the field. Therefore, it is "the shade of interest."

Similarly, giving a field as security does not resemble selling a field under an asmachta. When a person sells under an asmachta, he does not resolve to make the sale. When he gives a field as security, by contrast, he resolves to sell the potential to benefit from the land.

Similarly, from the Talmud, it appears that a property given as security involves "the shade of interest," and that can be understood only if we say that it refers to a person who gives a field as security, as my masters ruled.

Thus, there are three ways in which property can be given as security: security where taking benefit involves fixed interest, security where taking benefit involves the shade of interest and security where taking benefit is permitted.

What is implied? If a person gave a colleague a property where benefit is continually present, e.g., a courtyard, a bathhouse, or a store, as security, it is considered as fixed interest. If he gave him a field or the like as security and it produced profit from which he benefited, it is considered as "the shade of interest."

If he gave him a courtyard or the like as security and made a deduction, it is considered as "the shade of interest." If he gave him a field as security and made a deduction, it is permitted.

What is meant by "making a deduction"? A person lent a colleague 100 dinarim. The borrower gave him his courtyard or his field as security and the lender told the borrower: "I will deduct a silver me'ah each year as rent for the property, so that I can receive all of the benefit from the courtyard," or the like, it is forbidden. If he gives a field or the like as security, it is permitted.

Some of the Geonim have ruled that whenever property is given as security and nothing is deducted, it is considered to be fixed interest. They did not penetrate to the depth of the matter to distinguish between a field and a courtyard. Therefore, the words of the Talmud appeared problematic to them.

Similarly, they ruled that it is always forbidden to give property as security without a deduction being made, whether for a courtyard or a field, except according to the following arrangement.

What is implied? The lender loaned the borrower 100 dinarim, took a house or a field as security, and stipulated that after ten years the property would return to its owners at no charge. The lender is permitted to benefit from the produce of the property for the entire ten years, even if ordinarily its rent would be 1000 dinarim a year. For in effect, what he is doing is renting it at a lower price.

Similarly, it is permitted if the owner of the field added a stipulation that whenever he brought the renter or lender money, he would deduct a rent of ten dinarim a year from the amount and leave the property. Similarly, it is permitted if the borrower added a stipulation that whenever he desired, he could calculate the time that the lender or renter dwelled in the property and pay him the remainder and then he would leave the property. The rationale is that it is a rental that is involved, and any stipulation involving a rental is binding and permitted, as explained previously.