What is a Heter Iska? Part I The Mitzva to lend is fulfilled when one lends without charging interest. If one’s business lends with interest he must ensure to structure a valid Heter Iska. Assuming the Heter Iska was executed in a proper fashion, he does not transgress an Issur of Ribbit. However, the Hafetz Hayim gives two reasons why it is preferable to lend without using … [Read more...]
The Avissar Family Ribbit Initiative Ribbit: Matters of Interest
Ribbit in Corporations Being that the Issur Ribbit is only applicable Bein Yehudi l’Yehudi, dealing with large banks or public corporations is usually not a Ribbit problem. However, if a Jew is guaranteeing the loan, in many instances Halachah views his obligation as if the guarantor himself is the lender and would therefore be prohibited. There are a surprising number of … [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. DELAYED PAYMENT If a store sets a price on an item, they may not charge more for credit. This is known as Agar Natar (charging for credit, a form of Ribbit). Many times, stores run sales with a two tier pricing system: the cheaper price for those who pay cash, and the higher price for those who buy on credit. An interest-bearing financing plan for a customer who purchased … [Read more...]
OVERVIEW OF THE LAWS OF RIBBIT
The Torah commands us to lend money to a fellow Jew in need. Since all Jews are brothers, we are commanded to extend this loan without charging interest. Charging interest on a loan may violate numerous Biblical and rabbinical prohibitions. All parties involved in the loan/transaction can also be in violation of the above transgression. Hence the borrower also transgresses the … [Read more...]