Hilchos Choshen Mishpat
Volume I : Number 10
The Halachos Of Lending Money
What are the guidelines and practical ramifications of the Mitzvah in the
Torah of "Im Kesef Talveh Ess Ami" (You Shall Lend Money To My People)
What is the Halacha?
- There is a Positive Commandment in the Torah to lend money to anyone
who needs it. This applies, whether the recipient is a wealthy person
who is having a cash-flow problem, or a poor person, according to the
financial ability of the lender, and for as long as possible. Lending
objects is not a specific, individual Mitzvah, rather it is included in
the general Mitzvah of being kind to others.
The Mitzvah to lend money is even greater than the Mitzvah to give
Tzedakah, because a person is much less embarrassed to receive a loan
than to receive Tzedakah. Also, by giving a loan you can help a borrower
retain control over his business investments and give him the opportunity
to stand on his own two feet and not have to accept hand-outs from
- The lender has a right to demand proper collateral for his loan to
guarantee that it will be paid back in a timely manner. If the lender is
not satisfied with the guarantees provided, he has no obligation to lend,
even if the borrower is a poor person. It is essential that a person keep
in mind when faced with this situation that all of his actions must be
L'Shem Shomayim (For The Sake Of Heaven).
- If two people approach you for a loan and you are only able to lend
to one of them, you should give precedence to the poorer person.
- A relative generally takes preference over anyone else, if both
borrowers are financially equal, even if the other person requesting the
loan is a Talmid Chochom (A Torah Scholar). However, if the relative is
wealthy and the other person is poor, the poor person takes precedence.
Also, if you know that your relative would be able to borrow from another
source, and the other person has no other source to borrow from, the
other person would take precedence, even if your relative was poor.
- The Halachah that a relative takes precedence over others, only applies
when you are lending your own money. If you are a trustee over a communal
loan fund, it is absolutely forbidden to give your relative preference
over others. The loans should be offered to all equally as predetermined
by the fund, whether it be on a first come first served basis, or based on
need. This applies even if the trustee was the one who set up the fund
and donated a large amount of his own money to it.
- If you have been approached by a number of people for loans, and one
needed a very large amount, to the extent that if you would lend him what
he is requesting you would be unable to lend the others at all, it is
preferable to provide a few loans of smaller amounts than to give it all
to one person. If the person requesting the larger amount needs it to
avert financial disaster, and the others just need the money to increase
their cash-flow and make things easier for them, the full amount should
be given to the one who requires the larger amount to prevent him from
- If you told someone that you would lend him money or objects, or if
you decided to separate a percentage of your income to start a free loan
fund (Gemach), it is considered as if you had taken a vow to this effect
and it is forbidden to change your mind.
The above Halachos are discussed at length in the Tur (Choshen Mishpat
97) and in the Shulchan Oruch (ibid.) They are also discussed in the
Rambam in the first Perek (Chapter) of Hilchos Halva'ah (The Laws Of
Lending). Additionally, many of the above points are mentioned in the
first six chapters of Sefer Ahavas Chesed by the Chofetz Chaim.
This class is translated and moderated by Rabbi Aaron Tendler of Yeshivas
Ner Yisroel in Baltimore. Rabbi Tendler accepts full responsibility for
the accuracy of the translation and will be happy to fax originals of the
articles in Hebrew to anyone interested.
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Please Note: The purpose of this column is to make people aware of Choshen Mishpat
situations that can arise at any time, and the Halachic concepts that may be used to resolve them. Each
individual situation must be resolved by an objective, competent Bais Din (or Rabbinic Arbitrator) in the
presence of all parties involved!
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