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Let's say Reuven lends Shimon $100 for 30 days. He then comes to Shimon on day 20 and says, "I need money urgently, if you pay me $90 now then I'll write off the rest of the loan". Would this be ribit (in this case, paid by the lender to the borrower)?

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It seems like it is permitted. See יורה דעה קע"ג and see the דרכי משה who notes that while buying out the lender directly is permitted, selling the debt to a third party at a discount is absolutely forbidden.

All this basically emerges from the משנה on בבא מציעא ה:ב, which states that

One may offer [an early payment discount] on a rental, but not a sale

The rationale being that since a rental is only due at the end of the period (שכירות אינה משתלמת אלא בסוף), the renter is giving the landlord a benefit (extra liquidity) in exchange for which the landlord gives the renter a partial forgiveness of the debt; while in a sale, the amount is due immediately, so if the buyer pays a higher amount later, he is adding a penalty for late payment (אגר נטר), which is אבק ריבית. Since a debt has a set ending period, it is more like rental.

Both of these seem to be assuming that there is some grey area about the exact price agreed upon, which wouldn't seem to apply to a loan. But I'm a little out of my depth at this point.

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  • while buying out the lender directly is permitted, selling the debt to a third party at a discount is absolutely forbidden. What? The reason you're allowed to buy out the lender at a discount is because it's no different than selling to a third party. אם מכרן בי"ב על מנת לפורעו לאחר זמן יכול לומר תפרע לי מיד ואקבל ממך י' מידי דהוה כמוכר חובו בפחות שמי שיש לו שטר על חבירו או מלוה על פה יכול למוכרו לאחר בפחות ואין בו משום רבית. See also Rambam: לוקח אדם שטרותיו של חבירו בפחות ואינו חושש
    – shmosel
    Jan 24, 2023 at 23:11
  • That's when the lender is selling the debt to a third-party. What I was saying is that the borrower may not pay back a third party to take his place at a discount. ie Reuven lends $100 to Shimon, Levi needs money now so Shimon pays him $90 now to take over his debt and pay Reuven back $100 at the end of the loan period. My phrasing wasn't the clearest. sefaria.org.il/Darchei_Moshe%2C_Yoreh_Deah.173.6?lang=he Jan 25, 2023 at 8:03
  • Got it. Though I wouldn't translate נראה as absolutely.
    – shmosel
    Jan 25, 2023 at 9:30

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