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Can a Jewish-owned business that extends interest-free house account/credit, billable on a monthly basis (as per signed agreement), demand early payment? Would this be considered taking interest, as the borrower will lose two weeks of using their money (say investing the cash), while the store could themselves place the early payment into an investment that earns them money? The consumer loses two weeks' worth of investment, while the store gains the same. Is this considered a prohibited form of interest?

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I fail to see the equivalence of when something is paid with charging interest on a loan. Especially since not everything is paid back immediately and you could make the reverse argument. If you have a contract with them where you only have to pay at a certain time (or even if not) bring it to their attention and request extra time. But if it's all the same to you, just pay your bill on time. –  A L Aug 28 '13 at 3:05
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They sent the bill early, but did they also request early payment? But that aside, this question feels a little too specific to your situation; can you edit to generalize it? A question about whether early invoicing is collecting interest would be more broadly applicable while still helping you solve your problem. Thanks. –  Monica Cellio Aug 28 '13 at 3:21
    
AL I fail to see why you don't see the interest connection. The store is extending credit, and is expecting payment in full at the end of the month. By demanding early payment, I loose the interest that would have been earned if the money remained in the bank until it was normally due. By receiving an extra payment this month, the store is reaping benefit from the extra money. –  JJLL Aug 28 '13 at 12:28
    
@user3142, does the agreement provide anywhere in writing for the store to change the payment due date? –  Seth J Aug 28 '13 at 17:40
    
@SethJ I don't know why that is relevant for this particular question. It seems to me that if they don't charge more than the price of the groceries, it's not interest. –  Daniel Aug 28 '13 at 17:44

1 Answer 1

When a loan is given and a time is set for the return of the loan, the lender may not demand the return of the loan before the set time has arrived (Choshen Mishpat 73, 2). However, if the borrower wishes to repay the loan before the time has arrived he may do so (Choshen Mishpat 74, 2). This is the general rule (albeit there are certain special circumstances where the halacha is different - see in the previous sources and the commentaries for the details). Either way, early payment of the loan is not considered interest, as interest only applies where the lender gains more than the repayment of the loan. Early repayment is not considered a gain, as if he wouldn't have given the loan he would have had the money the whole time. Thus he has not gained anything from the loan. The only issue is whether the lender is entitled to the money before the time has arrived, and the basic rule (barring special circumstances) is that he is not, but if the borrower agrees to pay then he may do so.

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A belated thank you Ofer for your response. –  JJLL Oct 15 '13 at 1:12

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