“Ribbit”: The prohibition of lending money with interest (2)

As explained previously, it is forbidden for a Jew to lend or borrow money with interest (“Ribbit”). This includes loans that are made between friends or family members. Even though everything is in good spirits and everyone is fine with it, it is forbidden, as it promotes a bad habit.

Illustration: Because he had forgotten his wallet at home, Mark’s teenage daughter, Lynn, lends him $5 to pay the toll. Mark wants to reward his daughter. He wants to repay her back $10 for the $5 he borrowed. Even though he would do this willingly and in good spirit, he is not allowed to. By receiving $10 for $5, Lynn would be getting the wrong message regarding loans and interests.
Not only is it forbidden to lend/borrow with monetary interest, but any kind of interest is forbidden—even if it is through something other than money.

Illustration: Evan needs urgently a loan of $10K. Danny, who is renting an office in a building Evan owns, accepts to lend him the money he needs, which Evan will repay without interest, but with the condition that he gets one month of rent free. This is also Ribbit and is forbidden.

Note: The laws of “Ribbit” are very complex, especially in today’s corporate world of sophisticated financial and legal structures. Ours is a basic overview of the Halakha as found in Maimonides’s Mishne Tora and in Shulchan ‘Arukh. Please consult a competent rabbi with any practical questions (Halakha leMa’ase).