Rambam - 1 Chapter a Day

The term “resident alien” refers to a gentile who has formally accepted the observance of the seven universal laws commanded to Noah and his descendants. For this reason, he is granted permission to dwell in Eretz Yisrael. See Hilchot Avodat Kochavim 10:6.
The Lechem Mishneh notes that although the verse (Leviticus 25:36), “And your brother shall live with you,” is also applied to a resident alien, it is permitted to take interest from him. This implies that lending at interest is not taking unfair advantage of the borrower.

Note the Maharam of Padua, who interprets this as referring to an idolater. He explains that one may lend to a resident alien at interest, but there is no obligation to do so. With regard to an idolater, by contrast, it is a mitzvah to charge interest. See the following notes.

Our translation is based on Chapter 4, Halachah 2, which cites this verse as the source for the prohibition against borrowing - not lending - money at interest. Significantly, in the summation of these mitzvot at the beginning of these halachot, the Rambam defines the mitzvah as “to borrow and lend money to a gentile at interest.” The Kessef Mishneh questions: “How can borrowing from a gentile at interest be considered a mitzvah? Why should we bring him benefit?” Based on the explanation in note I, one might say that since lending at interest is the ordinary pattern and is considered fair business practice, it is proper to borrow from a gentile at interest.

Sifri in its commentary on the verse.

See Sefer HaMitzvot (Positive Commandment 198) and Sefer HaChinuch (Mitzvah 573), which include this as one of the 613 mitzvot of the Torah. The Ra’avad - and his view is supported by the Ramban (Hasagot to Sefer HaMitzvot, General Principle 6), the Maggid Mishneh, the Rashba and others - differs with the Rambam and states that this charge is not considered a positive commandment. They interpret the Sifri as speaking about a loan given to a Jew, and explain that if such a loan is given at interest, both a positive and negative commandment are violated.
The Migdal Oz supports the Rambam’s decision, noting that we are prohibited against being gracious to a gentile (Deuteronomy 7:4). As explained in Hilchot Avodat Kochavim 10:4, this prohibition is interpreted as meaning that we may not give a gentile a present without charge. Now, since lending at interest is the ordinary pattern of the world, giving them a loan without interest would be equivalent to giving them a present. (See also the statements of the Maharam of Padua.)
The Tur and the Shulchan Aruch (Yoreh De’ah 159:1) use the expression: “According to Scriptural Law, it is permitted to lend money to an idolater at interest.” The implication is that making such a loan is permitted; there is, however, no mitzvah to do so.

Which our Rabbis modified, as the Rambam continues to explain in the following halachah.

According to the Rambam, our Sages’ prohibition involves the negation of a Scriptural commandment. Nevertheless, the Sages have this power, since one is not performing a deed to violate the Torah’s command.

The Tur explains that the later Rabbis abrogated this decree and permitted Jews to make loans to gentiles, even for profit. He explains the rationale for this license as follows. “At present... there is no way that we can make a profit from any business dealings unless we engage in financial transactions with [gentiles]. If so, there is no greater concern that one will learn from the gentile’s deeds with regard to interest than there is with regard to any other commercial dealings.”
The Maggid Mishneh mentions another reason for the license: Since extensive taxes are levied against the Jews and the cost of living is high, any profit can be considered as merely “earning one’s livelihood.” These opinions are echoed by the ShulchanAruch (Yoreh De’ah 159:1).

For he will seek out the gentiles' company so that he can make loans to them.

To avoid payment.

Because of their involvement in Torah study.

Since even for a Jew these activities are not forbidden by Scriptural Law, our Sages did not establish a safeguard for a safeguard, and did not forbid them when a gentile is concerned.

I.e., the Jew paying the Jew interest.

For the original borrower is not considered to be the gentile’s agent, but instead a principal acting independently.

Although the money was brought to the gentile, the gentile might desire that the original loan remain in force, because he knows and trusts the first Jew, but not the second.
When quoting this law, the Shulchan Aruch (Yoreh De’ah 168:1) states that the restriction applies even if the second Jew composes a legal document acknowledging his debt to the gentile and pays the interest directly to him. As long as the original borrower is not freed of the obligation, the second loan is forbidden.

And thus free the original borrower from his obligation.

We do not consider the gentile to be acting as the agent of the Jewish lender, but rather as a principal. Thus, the two Jews have no direct association with each other. The Jewish borrower owes the gentile, who in turn owes the original lender. Hence, interest is permitted for both loans. The Shulchan Aruch (Yoreh De’ah 168:6) states that this applies even when the Jewish borrower informs the Jewish lender of this arrangement.

I.e., it is forbidden by Scriptural Law. The rationale is that in this instance, the gentile is considered to be acting as the Jew's agent. Although generally, a gentile cannot be considered to be a Jew’s agent, with regard to prohibitions we adopt a more severe stance and place him in that role (Maggid Mishneh, explaining the positions of Rabbenu Chanan’el, Rashi and Rabbenu Yitzchak Alfasi).
This conception is not shared by all authorities. The Ramban and the Rashba consider this only as equivalent to “a shade of interest,” for, according to Scriptural Law, a gentile can never be considered to be a Jew’s agent. The practical difference between these two positions centers around whether the money taken may be expropriated by the court (as is appropriate if forbidden by the Torah) or not.
The Shulchan Aruch (Yoreh De’ah 168:6) follows the more lenient view. Moreover, the Ramah mentions the opinion of Rabbenu Tam, who maintains that such an arrangement is permitted; even according to Rabbinic law, there is no prohibition involved.

Without ever returning it to the original lender. And thus, one Jew never gave money to the other.

Our translation is based on the gloss of the Kessef Mishneh. The Tur and the Shulchan Aruch (Yoreh De’ah 160:3) offer another interpretation of this concept, stating that it means pretending that the money in his possession belongs to a gentile.

With the intent of splitting the profits between themselves.

In contrast to the practice required by Scriptural Law, as the Rambam states in Chapter 25, Halachah 3. Note the Maggid Mishneh and the Shulchan Aruch (Yoreh De’ah 170:1-2), which question if the intent is that according to the gentile practice, the lender would go straight to the guarantor and does not have the right to demand payment from the borrower. Or perhaps the intent is that the gentile practice is similar to that of an erev kablan in our laws, and the lender can demand payment from either the guarantor or the borrower, as he ch, ooses.

It would be forbidden for the borrower to pay the guarantor - because we consider the guarantor as having undertaken the debt and the interest - and then charging the Jewish borrower that interest. Hence, interest is paid from Jew to Jew. The fact that the original lender was a gentile is not of consequence.
The Tur and the Ramah (Yoreh De’ah 170:1) state that, after the fact, if a fellow Jew acted as a guarantor, the borrower is required to repay the principal and reimburse him for any other loss he suffered. He is not, however, required to reimburse him for the interest.

In such an instance, even if the gentile requires the guarantor to pay the interest, it is considered as if the guarantor lent the borrower one lump sum (the principal and the interest). The borrower repays this sum to the guarantor without interest.
The Tur and the Ramah state that at present, it is taken for granted that the gentile agreed to approach the borrower first. Hence, such loans are permitted even if such a stipulation is not explicitly stated.

Tallying the principal and the interest as a single sum.

For the convert had already accepted liability for the entire sum before his conversion (Turei Zahav 171:1; Siftei Cohen 171:1).

The Maggid Mishneh quotes opinions that maintain that the lender should be entitled to collect all the interest due before he converted. Nevertheless, our Sages ordained that a more stringent perspective be followed. Hence, they made everything dependent on when the reckoning was made. Otherwise, it might appear that one was taking interest from a Jew.

I.e., so that he would not have to pay the interest.

There is a difference of opinion if the borrower is liable even though a reckoning was never made. The Rashba maintains that the convert is liable, while the Maggid Mishneh cites other views - and maintains that the Rambam shares their opinion - that the convert is not liable unless a reckoning is made. See the Siftei Cohen 171:3, who rules that one should be stringent and follow this conception.

Implied is that the convert is not liable for the interest on the loan that accrued after the conversion, even when a reckoning was not made until after the conversion. This opinion is also shared by the Ramah and apparently quoted by the Shulchan Aruch (Yoreh De’ah 171:1). Significantly, however, Rabbenu Asher maintains that the lender may collect all the interest that accrues - even after the conversion - until a reckoning is made.

The Rambam maintains that it is a mitzvah to lend money to a gentile at interest (Halachah 1). That mitzvah is, nevertheless, superseded by the mitzvah of lending to a fellow Jew (Merkevat HaMishneh).

Our translation in this and the following clause is based on the interpretation of the Shitah Mekubetzet to Bava Metzia 70a.

Since an investment is involved and there is a possibility of loss, receiving the profit is not considered to be taking interest as forbidden by Scriptural Law. Nevertheless, since the likelihood of profit is high, our Sages considered it similar to interest and forbade it.

For disobeying our Sages’ charge (Shitah Mekubetzet, loc. cit).

See Hilchot Sh'luchin V'Shutafim 6:1-2, which explains the legal construct known as hetter iska as follows: Half of the money with which the investor endowed the partnership is considered a loan to the manager, and half as an investment. Thus, the borrower/manager is entitled to half the profits (for the money given as a loan is his), and the lender/investor to half the profits (for the other half of the money is his). Our Sages, nevertheless, forbade these arrangements, because they resemble interest. The borrower/manager is managing the lender/investor's money without charge, in return for having received the loan. They required the lender/investor to take either of the two measures mentioned at the conclusion of the following halachah to remove all similarities to interest.

Our Sages define a pious person as one who goes beyond the letter of the law and is willing to sacrifice his own interests in favor of a colleague.

In these two instances, the storekeeper and the produce wholesaler will not invest any capital and will receive half the profits of the sales as their wages.

In this instance, a profit will be reaped by selling the hatched chickens, for they are far more valuable than the eggs. The investor buys the eggs, and the manager has his chickens sit on them until they hatch.

A donkey or a cow will be worth far more in a year or two than it is directly after birth. The investor purchases the young animals, and the manager takes care of them until they reach the desired size.

These arrangements also resemble a hetter iska, as described in the previous halachah. Unless the manager is given one of the advantages that the Rambam mentions, the arrangement is forbidden, because it resembles interest.

In which instance he is not working in return for receiving the loan, but is instead working for the wage he receives.

Such a profit-sharing arrangement is considered tantamount to receiving a wage.

See Hilchot Sh’luchin V’Shutafim, Chapter 8.

I.e., the investment will not lead to a profit, but the lender/investor will not believe the borrower/manager and will require him to pay the entire sum stated in the promissory note. Since there will be no profit, this extra amount will be interest.
The Siftei Cohen 177:48 writes that this applies even if the promissory note states that the investment was an iska, for there is a possibility that an error might occur.

I.e., instead of the document recording the investment stating that the money was given as an iska, it would state that it was given as a loan.
The Siftei Cohen 177:49 states that even the principal may not be recorded as if it were a loan. For the heir will not know that it was an investment and will demand payment of the entire sum. Hence, if there is a loss, he will be demanding money unfairly.

I.e., if the entire sum was written as if it were a loan, the heir will demand payment of the entire sum, regardless of whether there was a loss or a profit. Thus, if in fact there was a loss, if the borrower/manager paid the entire amount, it would be considered interest.

Even if he does not state that he is giving the present for the sake of receiving a loan. This is the interpretation of the Rambam’s conception by the Shulchan Aruch (Yoreh De’ah 160:6). The Tur and the Ramah differ and maintain that as long as the potential borrower does not say that the present is being given for the sake of the loan, there is no difficulty in giving such a present.

In this instance as well, the other perspectives maintain that if the borrower does not state that he is giving the present because of the loan, the present is permitted.

Since the obligation to pay interest was not stated at the time of the loan, the Scriptural prohibition against interest has not been violated.
Significantly, in his Commentary on the Mishnah (Bava Metzia 5:11), the Rambam writes: “The words of Rabban Gamliel [who states that such gifts are considered interest] are correct, but one must know that these matters and the like are very shameful.” Rav Kapach notes that this wording represents a change from his wording in the first edition of the Commentary on the Mishnah, and maintains that the Rambam adopted the perspective that this considered interest according to Scriptural Law. Others, however, maintain that the Rambam’s intent is that there is no question even of “the shade of interest” - merely shameful behavior.

Davar, translated as “types,” literally means “word.” Bava Metzia 75b explains that even words can be considered interest.

See the notes on Hilchot Talmud Torah 1:7, which explain that there are opinions that maintain that it is permitted to charge a fee for teaching adults Scripture. All agree that it is forbidden to charge for teaching Talmud. Nevertheless, even in places where it is customary not to charge for teaching Scripture, a borrower may not do so unless he was accustomed to doing so previously.

Since he was accustomed to teaching the lender previously, he is not doing him a favor because of the loan.

The Beit Yosef (Yoreh De’ah 160) and the Turei Zahav 160:5 raise a question: Seemingly, the lender is asking the borrower to provide the guest with services that are worth money. Why then does he mention this law together with other prohibitions involving interest associated with speech? [Indeed, on the basis of this question, the Tur and the Shulchan Aruch (Yoreh De’ah 160:12) interpret Bava Metzia 5:11 (the source of. this halachah) as meaning “Notify me if so and so from this and this place is coming.”]
The Turei Zahav, however, explains that this is speaking about an instance where the borrower would honor the guest regardless. Hence, there is no prohibition involved. Nevertheless, it is forbidden for the lender to make this request of the borrower, for he is receiving benefit from having given the loan.

I.e., a person may purchase a $100 check from a colleague that is post-dated for 6 months for $90. Although this resembles interest, for he is receiving an increase of $10 over his investment, it is permitted, provided he accepts the risk of the check’s bouncing. If, however, he will hold the seller of the check responsible for the loss, this is forbidden. Since the possibility of profit is great and the likelihood of loss is small, it resembles interest [Maggid Mishneh; Shulchan Aruch (Yoreh De’ah 173:4)].

Even if the borrower did a favor for the person who paid the money so that the lender would offer the loan, it is permitted as long as he does not pay him actual cash. This is the opinion of the Maggid Mishneh. The Shulchan Aruch (Yoreh De’ah 160:13), however, quotes an opinion that forbids this as well.

Even the son of the lender, provided he maintains an independent financial capacity [Shulchan Aruch (Yoreh De’ah 160:16)].

The person receiving the money may not, however, give it to the lender to encourage him to make the loan (Maggid Mishneh). The Ramah (Yoreh De’ah 160:16) mentions this opinion, but also mentions the view of the Mordechai, who cites one of Rashi’s responsa that states that it is permitted for a Jew to tell a colleague: “Borrow money for me from so and so, who is Jewish, at interest,” and for him to pay him the interest via an emissary. Since the interest is not being paid directly from the borrower to the lender, there is no prohibition involved. Now all these authorities - Rashi, the Mordechai and the Ramah - state that this leniency should not be made public, lest the seriousness of the prohibition against taking interest be eroded in the eyes of the common people. Nevertheless, they do maintain that the ruling is within the bounds of Torah. The Beit Yosef and the Turei Zahav 160:11 object strongly to this decision, to the extent that they question whether Rashi ever issued such a ruling. The Ramah in his Darchei Moshe, the Bayit Chadash and the Siftei Cohen 160:22 support Rashi’s decision, explaining that as long as interest is not paid from the borrower to the lender, there is no prohibition involved.

I.e., the lender accepted upon himself a debt of a maneh, 100 zuz.

And the wheat was still worth 100 zuz [Ramah (Yoreh De’ah 163:3)].

And thus the lender gave 90 zuz and will be paid 100. Since sales - originally, from the lender to the borrower and then from the borrower to the lender - are involved, there is no Scriptural prohibition. Nevertheless, since this is an obvious circumvention of the prohibition against taking interest, it was forbidden by the Rabbis.

When a debt involves “a shade of interest,” the interest may not be expropriated from the borrower (Chapter 4, Halachah 6; Chapter 6, Halachah 1). With regard to “the circumvention of the prohibition against interest,” by contrast, the “lender” may collect the additional amount. Indeed, the court must facilitate his collection of it. The Tur and the Ramah cite opinions that differ and maintain that interest forbidden by Scriptural Law is involved.
The Maggid Mishneh and the Ramah emphasize that the license granted by the Rambam applies when, at the time that the lender gave him the wheat, he did not stipulate that the borrower would sell it back to him at a lower price. If the lender makes such a stipulation, the transaction is considered to be interest forbidden by a Scriptural prohibition.

See the conclusion of Chapter 6 and the beginning of Chapter 7 for the details concerning this practice. In the Talmudic era, when a field was designated as security for a loan, it was given to the lender.

As above, the court must enforce the collection of the rent (Maggid Mishneh).

Although our Sages forbade this practice, there is no Scriptural prohibition or even “a shade of interest” involved, because the money is being paid as rent.
This is the Rambam’s view. Rashi (Bava Metzia 68a) maintains that a Scriptural prohibition is involved. The Siftei Cohen 164:2 maintains that the Shulchan Aruch (Yoreh De’ah 164:1) follows Rashi’s view.

I.e., instead of speaking of a loan, the person giving the money and the recipient speak of “hiring” the coins as one hires other utensils. Since a loan is not involved, the concept of interest according to Scriptural Law does not apply.

The Turei Zahav 176:1 states that even if the recipient does not spend the money and returns it to the giver as is, since he had permission to spend it, the prohibition applies.

The Maggid Mishneh states that from the Rambam’s wording, it would appear that if the recipient did not desire to spend the money, but merely to display it and would return the same coins, it is permitted to hire them out. He supports his statements by quoting the Tosefta, which states that one may hire out coins to a moneychanger to use as adornments or to use in learning his profession. The Shulchan Aruch (Yoreh De’ah 176:1) quotes this ruling. The Ramah clarifies that this leniency applies only when the recipient does not accept responsibility if the money is lost due to forces beyond his control.

As opposed to a leader of brigands (Hilchot Gezelah 5:18).

I.e., even a fellow Jew.

I.e., there is no question of interest involved. The rationale is that the payment of the tax is comparable to a sale and not to a loan. Since the king is the ruling authority of the land and “the law of the land is your law,” it is permitted to take control of the Jew and employ him as a serf. See also Hilchot Gezelah 5:18 - which discusses the validity of the king’s authority and why enslaving him is not considered robbery - and also Hilchot Avadim 1:8, which discusses the degree of servitude that can be imposed.