The Prohibition of Interest in Jewish Law: Rules for Family Loans and Children

The prohibition against charging interest (ribit) in Jewish law is not limited to financial loans. Even promising to return more stickers, marbles, or other small items than were originally borrowed can violate this prohibition.

What about giving extra candy to compensate children for having to wait? And does the prohibition apply to loans between close family members?

Following are several important situations worth understanding.

Interest on Loans Between Family Members

The prohibition against charging or paying interest applies even between close relatives.

For example, if a father borrows money from his adult son who is financially independent and does not rely on his father for support, the father may not repay more than the original loan amount. This remains true even if he genuinely intends the additional money as a gift.

However, a different consideration arises when the additional amount is a gift that family members would ordinarily give one another because of their relationship. If the father would have given his son the same gift even without the loan, different rules may apply. These circumstances require further clarification under the relevant laws of ribit.

Does the Prohibition of Interest Apply to Children?

The prohibition of interest also applies to loans involving children who have not yet reached the age of Bar or Bat Mitzvah.

It is forbidden to borrow from a child with interest or to lend to a child with interest. Children are likewise prohibited from making interest-bearing loans to one another.

This principle extends beyond money to everyday items that children exchange. For example, a girl may not tell her friend, "Give me 10 stickers today, and I'll return 15 tomorrow."

Although this exchange may seem insignificant, promising to return more than was borrowed raises the same halachic concern as charging interest on a financial loan.

Can Children Receive Extra Candy as Compensation for Waiting?

Consider a children's Tehillim (Psalms) group in which participants receive candy after reciting Tehillim. One week, the organizers discover that there are not enough candies for everyone.

May the person in charge promise the children who did not receive candy, to get two candies to make up for it? The answer depends on whether the organizers were obligated to provide the candy in the first place.

If the organizers explicitly promised each participant a candy, and the children attended on the understanding that they would receive it, giving them additional candy as compensation for the delay would be prohibited because of ribit.

However, if there was no binding commitment to distribute candy, the organizers may give those children two candies the following week. The key distinction is whether the additional candy constitutes compensation for delaying an existing obligation.

Interest on Loans Involving Public Institutions

The prohibition of ribit also extends to loans involving public institutions that are not privately owned. These may include government ministries and public nonprofit organizations.

According to the halachic ruling presented here, it is forbidden both to pay interest to these institutions and to receive interest from them.

The fact that an institution serves the public rather than belonging to a private individual does not automatically exempt its financial transactions from the prohibition of interest.

Understanding the Broader Scope of Interest

These examples demonstrate that the Jewish prohibition against interest extends far beyond conventional banking and financial transactions. It can apply to family arrangements, exchanges between children, rewards promised by community organizations, and loans involving public institutions.

Even an apparently harmless offer to return a few extra stickers or give an additional piece of candy may raise a halachic concern when the extra amount is connected to a loan or delayed obligation.

Because the details of each arrangement can affect the ruling, practical questions involving ribit should be discussed with a qualified rabbinic authority familiar with these laws.