A person who lent with interest may not collect it, even if the borrower says he is giving the interest as a gift. This applies even to interest prohibited by the Sages (Y.D. 160:5; Shach 160:6). If the lender already collected the interest, there is a difference between ribbis prohibited by the Torah and that prohibited by the Sages. There is an obligation to return ribbis prohibited by the Torah – a loan with guaranteed interest (ribbis ketzutza) – even if the borrower willingly gave the interest. There is even legal recourse through Beis Din to force the lender to return the interest (Y.D. 161:5; Pischei Teshuva 161:5). If the borrower decides to forgo (mochel) the interest that he paid, though, his decision is valid, like with any other theft (Y.D. 160:5). If the lender earned a significant portion of his livelihood through ribbis and repents of his own accord, it is even recommended to forgo the interest, so as not to dissuade him from repentance (Y.D. 161:7). However, if the ribbis was prohibited by the Sages, Beis Din will not enforce returning the interest, but there is a moral obligation to return it according to most authorities (Y.D. 161:2; Pischei Teshuva 161:4).

Our Sages prohibited the lender from receiving any form of benefit from the borrower, even verbal benefit. This is referred to as ribbis devarim and is associated with the verse, “neshech kol davar” (any word). It is even prohibited for the borrower to go out of his way to greet the lender, if he was not accustomed to do so beforehand (Y.D. 160:11-12). Some authorities indicate that even simple, cordial thanks are prohibited, but many contemporary poskim allow a “Thank you” offered as common courtesy (The Laws of Ribbis, 3:14-18). Therefore, you should suffice with attaching a simple letter of thanks, without profuse writing. You may also give the lender greetings that are unrelated to the loan, such as “Mazal Tov” on the occasion of a simcha (Bris Yehuda 11(63)).

The prohibition of ribbis devarim, such as greeting the lender, is usually limited to the duration of the loan or the time of repayment, but is permitted afterwards. It is questionable, however, whether it is permitted afterwards if directly linked to the loan, such as thanking profusely for it (Bris Yehuda 10(8), but see Darchei Teshuva 160:87).

It is important to realize that there is a great mitzvah to grant an interest-free loan when a person is able to, not just a prohibition against charging ribbis. This is a fulfillment of the verse (Shemos 22:24), “When you lend money to My people…” (C.M. 97:1). The amount and duration of a loan that a person is required to lend depends on his financial ability and the needs of the borrower. You are not required to borrow money or sell assets to grant a loan, but money which is deposited in a checking or savings account is considered available (Ahavas Chesed 1:4-5,12; Pischei Choshen, Halva’ah 1:9). A person can apportion some of his ma’aser kesafim for the purpose of granting interest-free loans, either through a gemach (free-loan fund) or private loans. The Chofetz Chaim recommends apportioning a third of one’s ma’aser for loans at first, until he has amassed a sufficient amount for granting loans (Ahavas Chesed, II, 18:1). However, a person is not obligated to grant a loan if he does not have sufficient security, collateral or guarantees from the borrower that he will repay (C.M. 97:4; Ahavas Chesed, 1:8).

There is a mitzvah upon the borrower to repay the lender. A person who borrows and does not repay is called “wicked” (Kesuvos 86a; Avos 2:14). Therefore, one should not borrow if he does not have a plan how to repay. Nor may the borrower squander his money so that he will be unable to pay when the loan is due (C.M. 97:4; Ahavas Chesed II, ch. 24).

The borrower is not allowed to withhold payment or stall the lender past the due date if he has the money (C.M. 97:3). If the lender is not present, the borrower is required to make sure that he has money available after the due date to repay the lender when he asks (C.M. 73:8). If the borrower refuses to pay when he is able to, some consider him a thief retroactively (Imrei Bina, Gevias Chov #2).

Conversely, if the lender knows that the borrower is not in a position to repay now, he may not pressure him or behave in a way that will embarrass him (97:2; see Pischei Choshen, Halva’ah 2:8).