Matters of Interest Part 2
Administrator, Baltimore Bais Din
Reviewed By Rabbi Mordechai Shuchatowitz, Head of the Baltimore Bais Din
In a previous article, we discussed some fundamentals of the prohibition of ribbis, interest. To summarize, ribbis is a prohibition that applies when someone takes a loan, and then returns the principal amount of the loan to the lender and adds on some extra as payment for the loan. We discussed that the most common case of ribbis is for a loan of money, where the borrower spends the money and then returns the principal amount with interest. However, the prohibition of ribbis applies to anything that is consumed. The most common example of this is lending food. For example, if the lender gave a loan of one pound of flour, and the borrower returned two pounds of flour, that would be a prohibition of ribbis. If the interest of the extra food was stipulated at the time of the loan, that would be prohibited by Torah law. This is called ribbis ketzutzah, stipulated ribbis. However, if the borrower returns more on his own because of the loan, this would be prohibited by rabbinic law, called ribbis me’ucheres, ribbis given by the borrower on his own, and is discussed in the Gemara Bava Metzia 75B.