Baba Metzia 5:1-2

Baba Metzia 5:1

"Interest" is when one person lends another a sela (which is worth four dinar) in exchange for five dinar, or two seah of wheat in exchange for three. This is called “neshech” in Hebrew, from the word meaning to bite. "Increase" refers to a person who increases his wealth by buying and selling produce as follows: Let’s say that one person bought wheat from another for a gold dinar per kor (= 25 dinar per 30 seah) and this was the going rate at the time. Later, the price of wheat rose to 30 dinar. The customer then asked the merchant for his wheat so that he could sell it to buy wine and the merchant replied that the wheat is now worth 30 dinar to him so that he will pay the customer back his 25 dinar with wine, but the vendor has no wine (so he would purchase it to pay back the 25 dinar he received for the wheat).

Baba Metzia 5:2

If one person lends another money, the lender may not live rent-free in the borrower’s courtyard, nor may he rent it for a reduced rate, because these are forms of interest. Rental fees for merchandise may be increased but prices may not be increased, as follows: It is permitted for one person to rent another his courtyard on the terms of ten sela for the year or a sela per month. It is not permitted to sell someone a field saying that the buyer may pay him 1,000 zuz now or twelve maneh (= 1,200 zuz) at threshing time. (This is the functional equivalent of lending 1,000 zuz in exchange for 1,200.)