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A Matter of Interest: The Laws of Ribbis
By HaRav Dovid Grossman, Rosh Bais HaVaad
WHAT IS RIBBIS?
The Torah prohibits borrowers and lenders from entering into a loan transaction with a fellow Jew that includes an interest obligation (Vayikra 25:35-36, Devarim 23:20, Shemos 22:24). Even if the loan was already illicitly made, it is further prohibited to follow through and actually pay or receive ribbis. In many cases, even if such payment was made, it must be returned to the borrower.
10 Forms of Ribbis
There are various types of ribbis. It is important to be able to identify exactly which form of ribbis is involved in each specific transaction, as the laws – as well as the recourse – may vary accordingly.
The various forms of ribbis include:
- ribbis ketzutza fixed interest; forbidden mid’Ooraisa
- ribbis she’aina ketzutza unstipulated ribbis; forbidden mid’Rabbanan
- tzad echad b’ribbis one-sided ribbis; cases where the existence of ribbis is subject to a specific occurance
- ribbis mukdemes paid in advance of a loan
- ribbis m’ucheres paid after the loan was made, but not required under its terms
- avak ribbis “dust” of ribbis; cases prohibited mid’Rabbanan
- ribbis devarim a verbal gift like effusive thanks, a blessing, or an honor
- ribbis derech mekach umemkar ribbis derived from a sale
- ha’ramas ribbis ribbis by trickery
- mechzei k’ribbis acts forbidden because they appear to be ribbis, though they aren’t