We discussed in Mitzvah #477 how personal loans are canceled in the Shemittah year. A person’s natural instinct might be to protect his financial interests by refraining from giving loans close to the end of the Sabbatical cycle. The Torah calls this a lowly (i.e., despicable) thought process and warns us not to act this way.
The reason for this mitzvah is simple enough: God wants us to be generous and charitable, not lowly and despicable. The most generous person is the one who lends money close to the Shemittah canceling such debts. He knows there is a risk that if the loan is not repaid before Shemittah voids the transaction, then he may never collect. Nevertheless, he does not refrain from helping another person. That’s the opposite of lowly and God will only bless those who attain this level of generosity.
This mitzvah applies in all times and places. It is discussed in the tenth chapter of tractate Sheviis and in the Talmud in tractate Gittin (36a-37b). It is codified in the Mishneh Torah in the ninth chapter of Hilchos Shemittah. This mitzvah is #231 of the 365 negative mitzvos in the Rambam’s Sefer HaMitzvos and #56 of the 194 negative mitzvos that can be observed today as listed in the Sefer HaMitzvos HaKatzar of the Chofetz Chaim.