Q&A from the Bais HaVaad Halacha Hotline

Declared Interest

November 28, 2024

Q My friend loaned me money and incurred expenses in withdrawing it and getting it to me. May I buy him a small gift to show my appreciation for his efforts?

A The de’Oreisa prohibition against ribbis (interest) applies only if the lender made the loan with the stipulation that payment beyond than the principal is required. But the Chachamim prohibited gifts or compensation even if the lender didn’t require it, and that includes a gift given in appreciation of the loan. The Shulchan Aruch (Y.D. 160:6) says that if a borrower repays a loan and subsequently sends a gift in appreciation of the lender tying up his funds, it is forbidden as avak ribbis (Rabbinic ribbis).

In certain cases, a lender may stipulate in advance that the borrower compensate him for the expense and effort involved in obtaining the funds, because ribbis is payment for the use of money, not for expenses incurred by the lender (see Maharam Schick Y.D. 158 on credit unions and Minchas Yitzchak 5:109 on gemachs). But this is permitted only if the arrangement is made beforehand, clarifying that the charge does not represent interest. In your case, because no such stipulation was made, you cannot give a gift to the lender even to acknowledge his efforts, as it would be viewed as a reward for the loan itself along with the expenses incurred.

You may, however, verbally express gratitude for the lender’s efforts and expenses. Generally, ribbis dvarim (verbal ribbis) is forbidden; the Shulchan Aruch (ibid. 11) says a borrower may not greet the lender upon encountering him if that hadn’t been his practice prior to the loan. For this reason, a borrower may not say “thank you” upon receiving the loan (see Igros Moshe Y.D. 1:80). Although some authorities do allow a simple thank-you as a polite gesture (see Minchas Shlomo 1:27), profuse expressions of gratitude are forbidden. But because your lender incurred expenses to provide the funds, you may thank him profusely if you make it clear that you are thanking him for the effort he expended and not for the loan itself (see Mishnas Ribbis 4:20).