Today is June 13, 2024 / /

The Torah Learning Library of Yeshivat Chovevei Torah

Behar – The Rosh Yeshiva Responds – Can a Lender Charge the Borrower for the Opportunity Costs of a Loan?

by Rabbi Dov Linzer (Posted on May 23, 2024)
Topics: Behar, Rosh Yeshiva Responds, Sefer Vayikra, Torah

Print Friendly, PDF & Email

https://pixabay.com/photos/credit-bank-money-finance-payment-4516068/

אַל־תִּקַּ֤ח מֵֽאִתּוֹ֙ נֶ֣שֶׁךְ וְתַרְבִּ֔ית וְיָרֵ֖אתָ מֵֽאֱ-לֹהֶ֑יךָ וְחֵ֥י אָחִ֖יךָ עִמָּֽךְ

do not exact from him advance or accrued interest, but fear your God. Let him live by your side as your kinsman (Vayikra 25:36)

QUESTION—Washington, D.C.

One person wants to lend a large sum of money (short-term loan) to another. The lender will withdraw money from an investment account to do this. In order to liquidate the investments, the lender will have a tax penalty and also have opportunity costs because he won’t be making money over the course of the short-term loan. I assume it is ribit (forbidden interest) to charge for the opportunity costs. Can the borrower pay the capital gains tax penalties that will result or is this considered ribit as well? Thank you.

ANSWER

Payment to enable the loan, even before the loan, is ריבית מוקדמת (ribit mukdemet), prepaid interest. There is a debate between the Rambam and the Rosh how explicit this has to be, but it seems that it is pretty explicit in your case. Prepaid interest is a rabbinic prohibition. If the money/gift will be given back if the loan doesn’t take place it would be ריבית קצוצה (ribit ketzutzah) fixed interest and forbidden mid’orayta, at a biblical level.

To read this post in Spanish, click here

To read this post in French, click here

To read this post in Hebrew, click here