68. Co-Signers and Notary Publics: The prohibition against taking part in a loan involving interest

…do not set interest upon him (Exodus 22:24)

Loans between private individuals may not include interest. (Rules are different for corporations such as banks.) Taking any part in such a transaction is prohibited. One can’t be the lender, the witness or even the scribe in such matters. (Even being the borrower under such terms is prohibited!) Depending on one’s role in the transaction, a person violates anywhere from one to six Biblical injunctions, leading the sage Rabbi Shimon to comment that lending with interest ends up costing a person far more than it earns him!

The reason for this mitzvah is that God wants us to help one another, not benefit from another person’s misfortune. If we give someone a loan, it should be out of the goodness of one’s heart, not because it’s an opportunity to make a profit. Rashi on this verse cites the Midrash Rabbah that one of the words for interest, neshech, is the same as that for a snake bite. Like a snake bite, interest doesn’t feel all that bad at first. However, the damage gradually spreads until it completely does a person in. (If you don’t believe this, try paying just the minimum due on your credit cards. You’ll end up paying $40,000 in interest on a $2,000 balance!)

This mitzvah applies to both men and women, in all times and places. It is discussed in the Talmudic tractate of Baba Metziah starting on page 71 and in the Shulchan Aruch in Choshen Mishpat 108. It is #237 of the 365 negative mitzvos in the Rambam’s Sefer HaMitzvos and #53 of the 194 negative mitzvos that can be fulfilled today as listed in the Chofetz Chaim’s Sefer HaMitzvos HaKatzar.