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Collateral /using a collateral phone
If a lender was given collateral (a mashkon) by the borrower, such as a cellphone with unlimited minutes, may the lender make use of the collateral for himself, or would that be considered as extra payment and consequently present a ribbit problem?
Maran, in the Shulchan Aruch (CM 72:1) rules that a lender may make no use of a mashkon. Any such use is rabbinically forbidden as it looks like ribit. (The reason why it is not actually ribit is because the debt is not increased in any way).
It makes no difference whether the borrower regularly allows the lender to use his telephone, unless the lender is given specific permission to do so, as explained in Brit Yehudah.
Where specific permission was given, the monetary value of the calls may be deducted from the amount of the loan.
Expensive collateral
A borrower gave the lender an item as collateral which was significantly more valuable than the loan amount. Subsequently, the borrower defaulted and did not pay back the loan.
May the lender keep the collateral, or would the extra value of the collateral be considered “extra payment” and thereby present a ribbit problem?
Maran, the Shulchan Aruch, identifies between two types of Mashkon.
- A mashkon given to the lender at the time of the loan, which is presumed to be security, and not for repayment.
- A mashkon given after the loan has been made, which is presumed to be for repayment.
In either case, where the mashkon was worth more than the loan, the difference must be returned to the borrower. If it is not, then it would be considered as a rabbinically forbidden form of interest.