The Mishnah in the fifth perek of Bava Metzia discusses different forms of interest that one would be forbidden to be involved with. One of these categories is interest that precedes or follows a loan. Rabban Gamliel states that if one was considering issuing a loan to an individual, and that individual was to provide an incentive (e.g. a gift) to ensure the loan was made this would be called ‘early’ interest. Conversely, ‘late’ interest is if one was to pay back a loan and then send a gift to the lender while mentioning that the gift is to compensate the lender for providing the loan. Both these examples are forbidden under the prohibition of ribbit.
The wording of the Mishnah seems to imply that the issur of late ribbit only applies where one paid back the loan with an extra gift and mentions specifically that the gift is to compensate the lender for not being able to use those funds for other purposes during the loan period. The Tur (Yoreh D’eah s.160) uses this implication to rule that if one provided a gift after the loan was paid but did not mention anything there would not be an issur. This also seems to be consistent with Rashi’s interpretation of the Mishnah, who explains that the reason one is able to add a gift at the time of paying off the loan is because it was not a condition stipulated when the loan was provided and nothing was mentioned to connect this gift with the actual loan, and therefore the gift itself stands alone.
The Rishonim (including the Ramban, Ran and Rosh) point out an apparent difficulty with this explanation. We have explained the issur of ‘late’ interest is due to the fact that one made specific mention of the purpose of the gift, as well as the fact that the gift was not given at the time the loan was paid back. The implication is that the ‘late’ interest seems to be tied to the person’s statement and timing of the gift. If one were to give a gift at the same time as the loan repayment even without mentioning the purpose then it would be assur as full-fledged rabbinic interest. From here the Rishonim state that the Mishnah’s category of ‘late’ ribbit only applies where one specifies that the gift was given in order to compensate the lender for the opportunity cost of having his funds tied up with the borrower.
The Ritva writes that from this Mishnah it is not clear whether the category of ‘late’ interest applies only in a case where one gives a gift and makes it clear that it is in consideration for the loan. Even if the borrower did not mention it specifically, yet gave a gift it would still be considered ‘late’ interest due to thoughts in his heart. This means that even if one does not say so specifically, but rather only gives a present to the lender, his internal thought would render that gift into the category of ‘late’ interest. The borrower’s internal thought of gratitude which manifests itself in the giving of a gift to the lender with the loan repayment, is enough to consider the gift as ‘late’ interest, despite the borrower not making mention of the gift’s purpose.
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