When Is It Permitted to Benefit the Lender
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- 1 Gifts or Favors from the Borrower
- 1.1 Before or After the Loan
- 1.2 Mitzvot
- 1.3 Favors, Kind Gestures, and Saying Thank You (Ribbit Dvarim)
- 1.4 Business Obligations Upon the Borrower
- 1.5 Following Instructions of the Lender
- 1.6 Paying When Debt Is Unclear
- 1.7 Lender Benefiting from the Borrower's Property
- 1.8 If Lender Benefited from the Borrower's Property
- 1.9 Hiring the Lender for a Job
- 2 Non-Financial Benefit
- 3 Collateral Fields
- 4 Payments from a Third Party to Create a Loan
- 5 Payments from a Borrower to a Third Party
- 6 Paying for the Fees and Other Losses of the Lender
- 7 Sources
Gifts or Favors from the Borrower
- It is forbidden to give a gift or interest even before or after a loan from another Jew and certainly during the loan. If someone does so they violated avak ribbit.
Before or After the Loan
- Some say that it is permitted to give a gift before or after the loan from another Jew if you don’t specify that it is because of the loan. However, others disagree. Ashkenazim follow the first opinion and Sephardim the second.
- All agree that it is forbidden if it is a large gift or if you specify it is because of the loan. The determination of a large and small gift depends on the people and context. Any gift which people would understand is in gratitude for the loan is forbidden.
- Some say that everyone agrees if one’s intention is to give it because of the loan it is forbidden. However, there is an opinion that it is permitted if one doesn’t specify that it is for the loan. For example, paying to be able to buy on credit is forbidden.
- Some say that it is permitted to give a gift before or after the loan from another Jew if you usually give the lender such gifts. It is permitted for a borrower to hand a tissue to the lender since it is a common courtesy.
- If it is a long time after the loan it is permitted to give a gift that isn't because of the loan. This statue of limitations to gifts depends on the context. As long as it is clear that it is because of the loan it is forbidden, but once it isn't clear that it is because of the loan it is permitted.
- If the borrower and lender have become friends because of the loan and at this point in their relationship it would be normal to give such a gift for the friendship such as for a celebration and not because of the loan it is permitted. This is only permitted if it is clear that the gift is for the friendship and not the loan.
- It is forbidden to teach one’s lender or his son Torah during the duration of the loan unless he did so regularly before the loan.
- It is forbidden to do the pidyon haben of one's son with one's lender.
- It is forbidden to buy an honor in Shul for one's lender.
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. This is called Ribbit Devarim and is a rabbinically forbidden form of ribbit.
- Ribbit Devarim only applies during the duration of the loan and not before or afterwards. Some say that even after the loan is repaid it is forbidden to thank someone for a loan explicitly because of the loan; also it is forbidden to flatter someone to give you a loan before the loan begins.
- 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.
- It is forbidden to write in a sefer thank you to someone who lent you money in order to publish a sefer.
- it is forbidden for the lender to ask the borrower for any favor even something simple as alerting him when someone will come to a certain place.
- It is forbidden to ask the borrower to do something for you even if he would have done so anyway.
- The borrower can’t go to the simcha (celebration) of the lender unless he would have done so anyway.
Business Obligations Upon the Borrower
- It is forbidden to lend money on condition that the borrower does business with him or someone else specifically. There is a doubt if it is Biblical interest or only rabbinic interest.
- If the lender has a job it is forbidden to stipulate that the borrower use the lender for his services whenever he needs that type of service.
- If the borrower has a job it is forbidden to stipulate that the borrower do that job even for a fair price for the lender whenever the lender needs it.
- If there is no stipulation it is nonetheless forbidden for the borrower to do business with the lender to hire him specifically. If the reason one is hiring him isn't because of the loan but because he has a better deal or the like it is permitted.
- 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.
- 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.
- 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.
Following Instructions of the Lender
- It is forbidden for the lender to tell the borrower that I will lend you on condition that you convince someone to give you a gift.
Paying When Debt Is Unclear
- If the lender and borrower can't agree on the amount of the debt the borrower can pay the higher of the amounts. Ideally he should specify that it is a gift and not for the loan.
Lender Benefiting from the Borrower's Property
- It is forbidden for the lender to benefit from the borrower's property for the duration of the loan without the permission of the borrower. The reason is that it appears to the public as though the lender is only benefiting from the borrower's property because of the loan and as such the lender is taking interest.
- Before or after the loan it is permitted for the lender to benefit from the borrower's property if it is the type of item that he would have done so even if not for the loan.
- If the borrower before the loan regularly lent his property to the lender even without his permission then it is permitted to do so during the loan.
- If everyone regularly borrows this type of item without the permission of the owner then it is permitted for the lender to borrow that item since it doesn't appear as though he is benefiting from the borrower because of the loan.
- It is forbidden for the borrower to let the lender rent a house of his or that he rented for less than the fair rent.
If Lender Benefited from the Borrower's Property
- If someone lent money he may not let the lender use his house for free. If he does that is considered rabbinic interest. If the house is up for rent then the lender needs to return the value of the rent. If the house isn't for rent and the owner wouldn't rent it, some say that it needs to be returned, while others holds there's no obligation to return it.
- If someone stipulates that his borrower can use his property for free, if the house is usually rented out, that is Biblical interest and must be returned. Even if it isn't usually rented out it is still rabbinic interest and must be returned.
- If the stipulation to use the borrower's property happened after the original loan but it happened when they decided to extend the loan, it is a dispute if it is Biblical interest.
Hiring the Lender for a Job
- It is forbidden to stipulate that you will lend me money and I'll hire you for a fair price because that is considered as though one is paying them for the loan. There is a dispute if this is Biblical or rabbinic interest.
- It is forbidden to lend money to someone and in the same situation be hired by him for a fare price because that appears to be interest. However, it is permitted if it is done in two settings. Alternatively, it is permitted if the loan is given as a complete gift even though the borrower is likely to give the gift back.
- It’s forbidden for the borrower to do a favor to the lender if he would not have done it otherwise (if not for the loan). Even if the borrower would have done a certain favor if not for the loan, the borrower may not do that favor in public unless they have a good relationship and the borrower has done public favors for the lender in the past.
- While some poskim prohibit the borrower from thanking the lender for the loan under the prohibition of ribbit devarim , other poskim are lenient and allow a simple thank you. 
- There’s no prohibition to do a non-financial favor after the loan was paid up. 
- It is forbidden for a lender to use the collateral that the borrower provided without certain conditions.
- If the lender eats the fruit of the field of the borrower that was a collateral some say that it is Biblical interest, while others hold it is only rabbinic interest.
Payments from a Third Party to Create a Loan
- It is permitted to give someone money in order that they lend money to someone else. That is only permitted on condition that the giver isn’t reimbursed by the borrower. Furthermore, the borrower can’t tell the lender that the giver is giving on his behalf.
- Some poskim add that the borrower may not convince the giver to give a gift to the lender. There is what to rely upon to be lenient.
- It is certainly forbidden to hire someone to get someone to lend you money and that hired agent pays the lender some of that money.
Gifts between the Borrower and a Guarantor
- A borrower who accepts to pay his guarantor some amount of money each month or period of time it isn’t considered interest since it isn’t a payment from the borrower to the lender. This is permitted unless the lender set up the loan in order to get the borrower to pay the guarantor.
Payments from a Borrower to a Third Party
- It is forbidden to ask a borrower to pay back anything in excess of the capital to someone else or a tzedaka. That is considered Biblical ribbit. If the third party already took the money the lender needs to return to the borrower the amount of that gift to the third party since he caused interest to be given.
- It doesn’t matter if the lender initiated this stipulation or the borrower initiated the stipulation and the lender agreed to lend on that condition.
Payments to a Third Party to Create a Loan
- It is permitted to pay a third party in order that he encourage someone to lend you money since the recipient of the payment isn’t the lender.
- This third party could be anyone besides a close family member such as a financially dependant child of the lender.
- It is forbidden for this recipient to give the money to the lender.
Gifts between the Guarantor and the Lender
- If the guarantor or anyone else accepts to pay the lender some amount of money each month or some period of time as long as the borrower hasn’t paid that is considered interest.
Paying up a Loan of the Lender
- It is rabbinically forbidden for the borrower to repay another loan of the lender if he does so besides returning the capital of the loan that he borrowed.
Paying for the Fees and Other Losses of the Lender
- It is forbidden for the borrower to pay for a loss than the lender incurred because the borrower didn't pay back on time. This includes a loss of profits and a loss if he had to take out an interest loan from a non-Jew. For example, if one Jew borrows another Jew's credit card and doesn't pay back on time if the credit card owner ends up paying the interest to the credit card company the borrower may not repay that interest to the lender.
- It is permitted for the borrower to pay for the writing of the contract, even for a part investment which is also for the benefit of the lender, for the security of the loan, and for the fee of extracting the money from the bank if the lender wasn't also doing it for himself.
- For example, if the lender is penalized by the bank for taking out his money early from an investment (such as a CD) in order to lend that money the borrower can pay for that fee. This applies specifically if he lost some of the capital or he already acquired interest and is now penalized, however, if he didn't yet acquire the interest the borrower may not pay for that loss.
- A gamach which charges a fee for a loan in order to ensure the upkeep of the gamach is a question but some permit it, yet it is better to do so without stipulating that it be paid. Either way the fee shouldn't be dependent on the amount of the loan.
- It is forbidden to pay the lender for his time and effort even if it meant he took off from work to arrange this.
- Mishna Bava Metsia 75b, Shulchan Aruch YD 160:6
- Shulchan Aruch YD 160:6, Shach 160:8. Bet Yosef 160:5 inquires whether giving a gift after the loan that was specified for the loan is considered a Biblical violation of ribbit or only rabbinic. He notes that the Rambam Malveh Vloveh 6:3 who writes that one only violates ribbit Biblically if it was specified at the time of the initial loan would think this is only rabbinic ribbit. See Bet Yosef 166:3 that perhaps Rashi holds it is Biblical.
- Tur 160:6, Bet Yosef citing Rosh, Hagot Mordechai 433, Smak 260, and Rashi 73b s.v. achulei, Rama 160:6. Smag cited by Tur 160:6 makes a compromise to allow it if it is a small gift.
- Rambam Malveh Uloveh 5:11, Shulchan Aruch 160:6
- Laws of Ribbis p. 87 is lenient.
- Rama 160:6
- Netivot Shalom 160:12 quotes the Machaneh Efraim 17 who says that if one gives a gift explicitly out of gratitude it is permitted, however, that is completely rejected by the Hagahot Ashri 5 and Rashba b"b 138b.
- Chelkat Binyamin 160:48
- Shach 160:10, Taz 160:3, Chelkat Binyamin 160:45
- Chavot Daat 160:3 writes that even if one intends to give a gift in order to get a loan it is permitted as long as one doesn’t specify that it is for the loan. Pitchei Teshuva 160:7 cites this.
- The Laws of Ribbis p. 87
- Tosfot 64b s.v. achal, Sefer Hatrumot 2:46:3:11, Rambam Malveh Uloveh 5:12, Bet Yosef 161:4
- Laws of Ribbis p. 90
- Bet Yosef 160:6 proves from Tosfot Gittin 20b that it is permitted to give a gift to the lender a long time after the loan. Shach 160:10 agrees but adds that if one specifies that the gift is because of the loan it is forbidden even if it is a while later. Chelkat Binyamin 160:49 argues and concludes that there is what to rely upon to be lenient.
- Chelkat Binyamin 160:49
- Netivot Shalom 160:6:13:4
- Rambam Malveh Vloveh 5:12, Shulchan Aruch 160:10. See Chavot Daat 160 who writes that according to the Rashba responsa 799 it should be permitted to teach him Torah since the lender didn't gain any financial gain. Nonetheless, Chavot Daat explains that we follow the Rambam who holds that any expenditure of money or time of the borrower for the sake of the lender is forbidden.
- Mishnat Ribbit 4:24 citing Ketav Sofer 146, Brit Yehuda 11 fnt 49. Mishnat Ribbit points out (based on S"A Y.D. 160:23) that this is forbidden even if the lender didn't stipulate in the beginning of the loan that the borrower must do the pidyon haben with him.
- Shach 166:1
- Gemara Bava Metsia 75b, Shulchan Aruch Y.D. 160:11
- Chelkat Binyamin 160:95
- 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
- Horah Brurah on 160:11 citing Shulchan Aruch Harav 160:9
- 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.
- 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.
- Mishna Bava Metsia 75b, Shulchan Aruch 160:12
- Taz 160:5 in explaining the Rambam, Chelkat Binyamin 160:111. Rav Meir Akoka in Bnetivot Hahorah 10:24 p. 150 proves from the S"A 172:4, S"A 160:23, and Mabit 1:6 unlike the Taz. He applies the Taz to many examples including: lending money on condition that he stops smoking, he puts conditions on how he can spend the money properly, for a certain apartment, how the loan is repaid with check or cash.
- Chelkat Binyamin 160:112
- Chelkat Binyamin 160::249
- Shulchan Aruch YD 160:23. Taz 160:22 disagrees that it is certainly forbidden for a borrower to give trumah to a kohen lender since the lender is gaining but doing business with someone isn’t considered a gain since he is paying for a service. Nekudat Hakesef 160:23 writes that if the lender didn’t have a lot of business and this agreement gets him more business it is forbidden. Chelkat Binyamin 160:248 is strict for Shulchan Aruch certainly in a case of hiring a worker.
- Shulchan Aruch 160:23
- Chelkat Binyamin 246 writes that the Gra 167:1 compares it to S"A YD 160:23. Chelkat Binyamin writes that according to the second answer of the Shach it is permitted but we shouldn't follow that answer alone.
- Rama 160:23
- Chelkat Binyamin 160:253
- Chelkat Binyamin 160:254
- 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.
- 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.
- Rabbenu Yerucham 1:8 cited by Bet Yosef 160:15 and codified by Shulchan Aruch 160:15.
- The Gra 160:31 explains that based on the principle of arev and eved kenani it is considered as though the money was given from that third party to the lender since it was given on his say so. Furthermore, since that gift was given by the agency of the borrower it is like he gave the gift to the lender.
- Taz 160:20 explains that it is forbidden since the lender has pleasure over the fact that people follow his instructions. Shach 160:8 seems to agree.
- Laws of Ribbis p. 88 citing Avnei Nezer CM 26, Brit Yehuda 5:35, Minchat Yitzchak 6:161, 9:88
- Netivot Shalom 160:7:7 suggests that perhaps nowadays when many loans take place in private and it isn't public knowledge using the borrower's property without permission could be permitted. If the loan is only known to a few people and those people know that anyway there was a previous relationship between the lender and borrower the Netivot Shalom thinks that the Shach 166:1 would be lenient.
- Tosfot b"m 64b s.v. aval, Rosh b"m 5:17, Rosh responsa 108:17, Shulchan Aruch Y.D. 160:7
- Chelkat Binyamin 160:57
- Chelkat Binyamin 159:58 citing Graz n. 11. Netivot Shalom 160:7:5 argues based on the Rosh 9:8.
- Chelkat Binyamin 160:58 based on Graz
- Ranach responsa 69 cited by Pitchei Teshuva 166:2
- Shulchan Aruch YD 166:1 writes that it doesn't need to be returned like the Ramban, but also cites the Rambam who says it is rabbinic interest and needs to be returned.
- Shulchan Aruch 166:2 cites both the opinion of the Rosh and not the Rambam who says it is always Biblical interest even if it isn't usually rented out.
- Shulchan Aruch 166:2 cites the dispute between the Rambam that it is rabbinic interest and the Rashi that it is rabbinic.
- Maharam (kirmona edition, responsa 257), Rama Y.D. 166:3. Chelkat Binyamin 160:43 writes that the Maharam writes that it is Biblical interest, while the Rama 166:3 implies it is only rabbinic interest. He concludes that it is an unresolved dispute.
- Rama 166:3, Chelkat Binyamin 166:45, Shulchan Aruch Y.D. 177:13
- The Weekly Halachah Discussion (vol 2, pg 346)
- Iggerot Moshe YD 1:80
- Rav Shlomo Zalman Auerbach in Minchat Shlomo 1:27
- Birkei Yosef Y”D 160:11, The Weekly Halachah Discussion (vol 2, pg 348), Malveh Hashem (vol 1, 8:30)
- Shulchan Aruch 164:4
- Shulchan Aruch Y.D. 164:4
- Rama 164:4
- Gemara Bava Metsia 69b
- Rosh b”m 5:47 holds that it is necessary to have 3 conditions in order for someone to give a gift to a lender. 1) the giver isn’t reimbursed by the borrower, 2) the borrower can’t tell the lender that he should lend him because of that gift, and 3) the borrower can’t initiate to have someone give a gift to the lender. The Ramban b”m 69b s.v. shari disagrees with condition 3 since ultimately the money isn’t given from the borrower it is permitted. Additionally, it is clear that the Ramban forbade asking an agent to give a gift for him. Ritva 69b s.v. amar accepts the Ramban that it is permitted to convince the giver to give the gift and he even allows the borrower to reimburse the giver since the giver gave it on his own. Shulchan Aruch Y.D. 160:13 accepts the Ramban but still insists that the first two conditions are necessary. Pitchei Teshuva 160:9 quotes the Mishna Lmelech Malveh 5:14 and Shaar Hamelech who think that according to the Ramban the second condition isn’t necessary. Chelkat Binyamin 160:128 quotes a dispute about this point and is lenient only in an extenuating circumstance as Shulchan Aruch implies that this second condition is absolutely necessary.
- The Rosh Bava Metsia 5:47 held it is forbidden for someone to ask someone to give a gift to someone in order that they lend for them since doing so makes the giver into an agent of the borrower. However, the Ramban 69b s.v. shari disagrees. Since the borrower isn’t paying for this gift and the money is coming from a third party it is considered as though the money wasn’t given from the borrower to the lender and is permitted. Rashba 69b s.v. ha writes that the Raavad held like the Rosh and the Ramban argued. Shulchan Aruch 160:13 follows the Ramban but cites the Rosh as an individual opinion.
- Shulchan Aruch 160:13 follows the Ramban as he does he writes in the Bet Yosef that since it is only rabbinic one can be lenient. Shach 160:18 cites this. Chelkat Binyamin 160:126 agrees. See however Pitchei Teshuva 160:9 who cites the Gedulei Trumah that this dispute is about a Biblical question.
- Taz 160:7
- Pitchei Teshuva 160:10 citing the Chavot Yair 190
- Tosfot Bava Metsia 71b s.v. maso writes that it is obviously forbidden to have the borrower pay someone else for the loan since that is like he paid the original lender based on the principle of arev. An arev is a guarantor who is indebted because money was paid to someone else based on his word, similarly, the interest is being paid to the third party based on the agreement of the lender. This is true even if the third party isn’t Jewish. Bet Yosef 160:14 cites the Haghot Ashri 5:47, Rabbenu Yerucham 1:8 27b, Mordechai b”m 327-328, Ran responsa 29:7 who agree. Mordechai 327 specifically forbids asking the borrower to give money to tzedaka.
- Mordechai b”m 327-328 clarifies that since giving the interest to a third party is Biblical interest it must be returned by the lender. This is cited by the Shach 160:19. Even though the Pitchei Teshuva 160:11 quotes that Rabbi Akiva Eiger wasn’t sure about this, Chelkat Binyamin p. 78 clarifies that it was only the questioner to Rabbi Eiger who wasn’t sure but Rabbi Eiger certainly would accept the Shach.
- Rama 160:14
- Gemara Bava Metsia 69b, Shulchan Aruch 308:16
- Shulchan Aruch 308:16. Taz 160:10 adds that a child even if they’re not financially dependant on the father it is forbidden to pay them since it is like paying the lender themselves. Shach 160:21 agrees. Pitchei Teshuva 160:12 cites the Lechem Rav who says that paying a husband to encourage his wife to lend him is forbidden since they are financially connected.
- Rama 160:16 writes that it is forbidden for the recipient of the money to give it to the lender since it is like a scheme of how to pay interest.
- Taz 160:6
- Radvaz 3:1060, Chavot Daat 160:5. Radvaz points out that this is different that the laws of someone who one took a neder not to benefit since paying their loans isn't a benefit.
- Rashba 3:227 writes that it is forbidden to pay for the loss of profits of the lender, otherwise no ribbit would be forbidden.
- Chelkat Binyamin 161:8. See Shevet Halevi 9:172 who forbids paying for lost profits but permits paying for interest payments the lender made to a non-Jew since that is considered like a damage he incurred because of the borrower.
- Laws of Interest 4:5 p. 79
- Chelkat Binyamin 161:8
- Chelkat Binyamin 161:8. Laws of Interest p. 82 fnt. 16 cites Rabbi J. David Bleich who argues.
- Laws of Interest 4:9 p. 81
- Chelkat Binyamin 161:8
- Laws of Interest 4:2, p. 79