From Bible Encyclopedia
The sum paid for the use of money, hence interest; not, as in the modern sense, exorbitant interest. The Jews were forbidden to exact usury (Leviticus 25:36, Leviticus 25:37), only, however, in their dealings with each other (Deuteronomy 23:19, Deuteronomy 23:20). The violation of this law was viewed as a great crime (Psalm 15:5; Proverbs 28:8; Jeremiah 15:10). After the Return, and later, this law was much neglected (Nehemiah 5:7, Nehemiah 5:10).
1. In the Old Testament:
The Hebrew law concerning exaction of interest upon loans was very humane. Hebrews were to lend to their brethren without interest (Exodus 22:25; Leviticus 25:36 f; Deuteronomy 23:19 f). This, however, did not apply to a stranger (Deuteronomy 23:20). Two stems are used in the Old Testament, rendered in the King James Version “usury,” in the Revised Version (British and American) better rendered “interest”:
(2) a stronger and more picturesque word, נשׁך, nāshakh, “to bite,” “to vex,” and so “to lend on interest” (Deuteronomy 23:19, Deuteronomy 23:20); noun form נשׁך, neshekh (Exodus 22:25; Leviticus 25:36 f; Psalm 15:5; Proverbs 28:8; Ezekiel 18:8, Ezekiel 18:13, Ezekiel 18:17; Ezekiel 22:12). It would be easy to go from a fair rate of interest to an unfair rate, as seen in the history of the word “usury,” which has come to mean an exorbitant or unlawful interest. Abuses arose during the exile. Nehemiah forced the people after the return to-give back exactions of “one hundredth,” or 1 percent monthly which they took from their brethren (Nehemiah 5:10 f; compare Ezekiel 22:12). A good citizen of Zion is one who did not put out his money to usury (Psalm 15:5). One who is guilty of this comes to disaster (Proverbs 28:8).
2. In the New Testament:
The Greek word is τόκος, tokos, literally, “offspring,” interest springing out of the principal. Money lenders were numerous among the Jews in Christ's day, and, in the parable of the Talents, He represents the lord of the unprofitable servant as rebuking the sloth in the words, “I should have received mine own with interest” (Matthew 25:27; Luke 19:23 the Revised Version (British and American)).