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I'm writing something about usury and want to mention Judaism's point of view on it. I've got two questions:

  1. Giving out loans with interest only to non-Jews has been so from the beginning, or is this a historical development?

  2. Do modern day Jews take loans with interest, from the bank for example?

  • Due to the closing of this question I'll fill you in by comment. Biblical law only prohibited lending with interest to Jews as . There was a few thousand year old Rabbinic injunction not to charge interest from nonjews as well, this was meant t keep a barrier between us and the idolatrous people so as to not learn from their ways. Around a thousand years ago the Jews in Europe were not able to keep an autonomous economy and the walls between Jews and idol worshippers were broken down. At this point, interest was longer a bigger threat of interaction than any other business so that injunction – user6591 Oct 11 '15 at 19:44
  • Fell to the wayside. This is actually a complicated issue. Usually rabbinic injunctions from the Talmudic times are not simply abandoned. But this is the basic story. – user6591 Oct 11 '15 at 19:46
  • I was uncertain about reopening this post and probably shouldn't have. These are two widely disparate questions you're asking and should probably be two posts. – msh210 Oct 12 '15 at 12:51
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To answer your first question, the Torah is very clear that interest may not be charged to Jews, but may be charged to non-Jews:

Deuteronomy 23:21

לַנָּכְרִי תַשּׁיךְ, וּלְאָחִיךָ לֹא תַשּׁיךְ--לְמַעַן יְבָרֶכְךָ יְהוָה אֱלֹהֶיךָ, בְּכֹל מִשְׁלַח יָדֶךָ, עַל-הָאָרֶץ, אֲשֶׁר-אַתָּה בָא-שָׁמָּה לְרִשְׁתָּהּ.

Unto a foreigner thou mayest lend upon interest; but unto thy brother thou shalt not lend upon interest; that the LORD thy God may bless thee in all that thou puttest thy hand unto, in the land whither thou goest in to possess it.

So this practice goes all the way back to the giving of the Torah. As opposed to (e.g.) Islam's view, Judaism does not really consider charging interest to be an immoral act. Lending money is a service, and there is nothing wrong in general with collecting payment for such a service.

The answer to your second question depends on who is doing the lending. The prohibition of interest applies equally to the lender and to the borrower; however, this again only applies when a Jew is lending money to another Jew. It is completely normal for Jews to take out an interest-bearing mortgage from a bank in order to buy a house.

It should be noted that the verse in the Torah seems to be talking about the case of lending money to a poor person who desperately needs the money. While the law also applies in other cases, the rabbinic literature is more lenient about cases where the borrower does not need the money to survive (e.g. a business investment) and allows certain loopholes that fulfill the same purpose as charging interest. For more information on that, research heter iska (See: How is a heter iska made to work with a non-business loan? and How do Interest Loans work in Israel?).

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Wikipedia confirms your view:

The Torah and Talmud encourage the granting of loans if they do not involve interest. But the halakhah [applicable Jewish law] regarding free loans apply only to loans made to other Jews. It is permissible to make loans with interest to non-Jews.

This article from jlaw says

Few committed Jews would deliberately lend (or borrow) money in violation of the injunction against charging interest. The article suggests some contemporary applications of the Ribis principle and discusses proposed remedies for each situation.

So you can see that there are modern Jews who do not lend to other Jews at interest.

  • You may wish to edit this answer in light of the update to the question. – msh210 Oct 12 '15 at 12:44

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