AREV: GUARANTEEING A LOAN (COSIGNERS) In certain instances, where a home buyer does not meet underwriting criteria, the bank may require a cosigner to guarantee the loan. The current practice of banks is to stipulate that they can collect from either the borrower or guarantor at their own discretion. Such a guarantor is referred to in Halacha as an “Arev Kablan” (equally … [Read more...]
Matters of Interest: Ribbit and Heter Iska
HETER ISKA II There are two basic types of Heter Iska that are written today; one is a “Hatzi Milveh Hatzi Pikadon” (half loan/half investment) and the other is a “Kulo Pikadon” )all investment). As a rule, money for which the recipient takes responsibility, is considered a loan, while money he is not responsible for is viewed as an investment. In a half loan/half … [Read more...]
The Avissar Family Ribbit Initiative Ribbit: Matters of Interest
Gifts to the Lender Sending a gift to the lender as a token of appreciation has a different set of rules. If the gift is sent before the loan is repaid, it is considered Avak Ribbit. If however, the gift is sent after the loan has been repaid, it falls under the category of Ribbit Me’uheret (belated interest) and is subject to the following guidelines. If the borrower … [Read more...]
The Avissar Family Ribbit Initiative RIBBIT: MATTERS OF INTEREST
Greeting as a form of Ribbit & more 1. ONE TIME PENALTIES If the lender issues an interest-free loan but stipulates that there will be a one-time late fee if the loan is not satisfied by a certain date, one would not be subject to the classical Biblical Ribbit prohibition. There is however a rabbinical prohibition. Such an arrangement would be classified as Ha’arama … [Read more...]
The Avissar Family Ribbit Initiative
1. RIBBIS FROM A NON-JEW, PART 2 In our previous issue we spoke about Ribbit from a non-Jew from a Biblical standpoint. Nevertheless, Hachamim forbade lending to a non-Jew with Ribbit, if that Ribbit would’ve been classified as Ribbit D’Oraita. The reason for this decree is in order that we keep our distance and not learn from their way of life. There are however two … [Read more...]