Interest in the Gemach Regulations
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Question
I have a gemach for lending electrical appliances, and from experience, if there is no penalty for late return, people forget and do not return them. Is it permissible to have a clause like: 'For every 24 hours of delay, a penalty of 5 shekels must be paid'?
Answer
Hello Rabbi,
Such a clause constitutes interest.
The permissible wording is: 'The rental fee for the item is 5 shekels per day. If the item is returned within 24 hours, the rental fee will be waived'.