ECONOMY 23 – Interest on Loans?
Is it permissible to take interest on loans? To whom? – Following is a Word Study on this topic and some thoughts about the Scriptures found:
H5391 נָשַׁךְ nâshak 16x in the OT
Deuteronomy 23:19-20
“You shall not lend upon usury (H5391) to your brother; usury (H5392) of money, of victuals, of any thing that is lent upon usury (H5391). Unto a stranger thou mayest lend upon usury (H5391), but unto they brother thou shalt not lend upon usury (H5391): that the LORD your God may bless you in all that you set your hand to in the land that you are going to possess.”
“You shall not charge interest on loans to another Israelite, interest on money, interest on provisions, interest on anything that is lent. On loans to a foreigner you may charge interest, but on loans to another Israelite you may not charge interest, so that the LORD your God may bless you …”
- A distinction is between charging interests on loans between a brother (no allowed) and a foreigner (allowed), whether money, provision or other item.
- Is this a principal prohibition of all interest on all loans?
H5392 נֶשֶׁךְ neshek 12x in the OT
- From H5391, meaning interest on a debt, usury
H8636 תַּרְבִּית tarbı̂yth 6x in the OT
- Meaning percentage or bonus in addition to principal, increase, unjust gain.
- The two are frequently used together and also used interchangeably, it seems.
H4768 מַרְבִּית marbı̂yth 5x in OT
- Meaning offspring; specifically interest on capital), greatest part, greatness, increase, multitude. Only in Lev 25:37 referring to money increase.
Exodus 22:25
“If you lend money to any of my people that are poor by you, you shall not be to him as a usurer (H5383), neither shall you lay upon him usury (5392).”
“If you lend money to my people, to the poor among you, you shall not deal with them as a creditor; you shall not exact interest from them.’
- No charging of interest on loans to the poor (loans for essentials, productive loans for people just starting up)
- This seems to imply, though, that loans to other people may have interest (business loans, acquisition of valuables?)
- How does a “creditor” deal? Is this precisely the normal business loan against a fixed, reasonable interest?
- The case of a needy relative, possibly one of one’s own community > support them (presumably with interest free loans, possibly donations). No money making of the poor, or those in special need, adverse circumstances, dire straits.
- Again this seems to imply that a relative or one of one’s community that is not in need but maybe wants to start up a business or acquire some land may be loaned to at interest.
- Bible: God demands increase. Money, valuables, possessions, talents, skills are generally meant to increase > so the taking of interest should be possibly without hurting the person. Or is the idea that the increase fully goes to the one making the effort? Or can the increase be split between lendor and borrower? Or is the borrowing at a fixed rate and then all ‘business success’ exceeding that goes to the borrower?
Psalm 15:5
- The parallelity implies two rigtheous behaviors, the opposite two unrighteous behaviors.
- Is this referring to all interest taking? Or only to interest taking on the poor and needy or excessive interest taking?
“He who increases his substance by usury (H5392) and unjust gain shall gather it for him that will pity the poor.”
“One who augments wealth by exorbitant interest gathers it for another who is kind to the poor.”
- God will see to it that unrighteously earned money does not stay with the one committing the unrighteousness.
- The expression “exorbitant interest” seems to indicate that there is also such a thing as “appropriate interests”, so that interests are not forbidden in all cases.
Ezekiel 18:17
“He that has taken off his hand from the poor, that has not received usury (H5392) nor increase (H8636), who has executed my judgments and has walked in my statutes; he shall not die for the iniquity of his father, he shall surely live.
“If he … takes no advance or accrued interest …”
“Jerusalem … in you they have taken gifts to shed blood; you have taken usury (H5392) and increase (H8636) and you have greedily gained of your neighbour by extortion (H6233) and have forgotten me, says the Lord God.”
“Jerusalem … in you they take both advance interest and accrued interest.”
- Four parallel Scriptures outlining basic moral behavior and basic immoral behavior. The taking of advance or accrued interest constitutes immoral behavior.
- What does advance interest mean? The person needs money so advance interest is really hard to give. Advance interest also means reduction of risk for the debtor, so putting pressure on the weak side, rather than on the strong side. Or is the point here that both advance and accrued interest is taken, so a double pressure that the borrower will find it hard to get out of?
- What does accrued interest mean? Accrued over time, so maybe not required at first but later > tempting the borrower to agree? Or accrued over too long time, meaning the Sabbath year is not obeyed? Or is interest always an ‘accrued’ sort of thing and therefore principally forbidden?
- Again: is this a prohibition of all interests? Or a short hand to denote forbidden types of interest (to the poor and needy, exorbitant amounts or here advance and accrued interest).
- The parallel arrangement implies two righteous behaviors, the opposite two unrighteous behaviors.
Summary
- In summary it seems that loaning against interest is okay in the case of business loans, but not in the case of loans to the poor and needy (except to foreigners). Exorbitant interests or double charges are forbidden.
- Both John Calvin and William Carey concluded that business or agricultural loans against limited, fixed interests are okay and fixed it at 4% (Reference?).
H7810 שַׁחַד shachad 23x in OT
- Meaning a donation (venal or redemptive), a bribe, bribery, gift, present, reward. Following is a list of all occurrences. For a discussion of this topic, see ECO 15 – Bribes & Corruption”on the same website.
Deu 10:17, 2 Chr 19:7 God doesn’t regard persons, nor takes reward
Prv 17:8
Prv 17:23
Prv 21:14
Isa 1:23
Is 45:13
“Jerusalem … In you they have taken gifts to shed blood; you have taken usury (H5392) and increase (H8636) and you have greedily gained of your neighbour by extortion (H6233) and have forgotten me, says the Lord God.”