Parsha Mitzvot: Ki Teitzei: Mitzvah 545 – Concept 537
“You shall not cause your brother to take interest, interest of money or interest of food, interest of anything that he may take as interest. You may cause an idolater to take interest, but you may not cause your brother to take interest, so that God, your Lord, will bless you in your every undertaking on the Land to which you are coming to possess it.” (Deuteronomy 23:20-21) You may lend to, and borrow from idolaters with interest. (Rambam, Hilchot Malveh v’Loveh – The Laws of Creditor and Debtor)
There are two ways to lend and borrow money: One can lend or borrow money as a business transaction; One person needs money to start a business and the other wants to invest his money.
The other way to lend money is as act of Chesed; nurturing the life of another person with whom you share core values. To lend or borrow money as a business deal when you have an opportunity to lend as an act of Chesed, is a rejection of the shared covenant.
Interest is only permitted when the loan is not a statement of mutual responsibility between two parties of a shared covenant.