Shulchan Aruch - Usury cont'd

Note: It should be stressed that the statements in a summary must not be interpreted as halachic rulings no matter how definitively they are worded. When such rulings are needed a qualified rabbi must be consulted.

Part II: Yoreh De'ah Chapter 13b - USURY cont'd

If a borrower gives a lender property as security for a loan the lender may keep any income produced by the property provided the amount of the loan is reduced, even if not by the full amount of the income; but such an arrangement is forbidden if the borrower guarantees that the lender will not suffer any losses because of the property (172:1, and see 3-4,6). On transactions in which the lender rents the property back from the borrower see 164:1-4;172:2.

It is permissible to buy someone's debt for less than its face value and then to collect the full value provided the buyer is at risk if the debt cannot be collected; see 173:4-5. On other types of transactions that involve payments or benefits to a lender see 177:8-10,13-17.

It is permissible to lend someone money or goods for business purposes and to share in the resulting profits provided the borrower receives some payment for his efforts in addition to his share in the profits (167:1; see 173:15-16, 18-19 and 177:1-7,12,20-40).

A loan of goods may result in payment of interest if the goods increase in value and the borrower returns their current value; but such loans are permitted if they involve only a small quantity of goods, or if the borrower has access to goods of the same type, or if the goods have an official market price, or if the monetary value of the goods is specified at the time of the loan (162:1-5;163:1-3; see 173:6,17).

Advance payment for purchased goods may violate the prohibition against interest if the price of the goods goes up; it is permitted only if the goods are nearly ready for delivery or have an official market price or if the purchaser is at risk of losing his investment (see 173:7-14;175:1-7). When a violation has occurred the sale is void unless the goods have already been transferred (175:8).

It is forbidden to charge a significantly higher price for goods in return for a delay in payment (173:1, and see 177:1); but once a sale has been made it is permissible to accept a lower price in return for immediate payment (173:3), to charge a higher price for immediate delivery (173:2), or to pay a penalty for failure to deliver (see 177:18). Charging a rental fee is permitted even if the renter is responsible for the value of the rented item in case of loss; see 176:1-5. On making a rental price or a salary depend on how soon payment is made see 176:6-8. If a sale is not final but the price has been paid, under some circumstances the price is regarded as a loan; see 174.

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