446. Advanced Interest and Delayed Interest

65:5 Even if the borrower tells the lender that he is giving him the surplus money as a gift, it is forbidden for the lender to accept it. Let’s say that the lender accepted it and wants to repent. He must return the surplus to the borrower. If the borrower refuses to accept it, the lender may then keep it.

65:6 One may not lend with interest, even if it precedes or succeeds the actual loan transaction. For example, let’s say that Reuven wants to borrow some money from Shimon. In order to make Shimon more inclined to lend it to him, Reuven sends him a gift. If it is stated or understood that this is to encourage Shimon to grant the loan, it is called advance interest and it is prohibited. If Reuven borrowed money from Shimon and, after he repaid the loan, he sent him a thank-you gift, this is called delayed interest and is likewise forbidden.