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What contracts did Templars use to lend money without breaking the church's interest ban?

Research question: What specific legal instruments or contracts did the Templars use to structure 'loans and advances' to avoid the canonical definition of usury?

The records show that the Templars carried out money loans and guarantees despite the church's prohibition of usury ¹⁴. Charging interest on loans was treated as usury and classified as a mortal sin, which is the problem the Templars worked around ³. The facts name the Mohatra contract only as an example of a transaction the Church condemned for circumventing the usury ban, and they do not say the Templars used it ². The facts do not name any legal instrument or contract the Templars used to structure their loans and advances, so the question is only partly answered ¹⁴.

Checked 2026-10-21. Only documented and supported facts are used.

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Sources

[1] supported

The Knights Templar in the 12th century, along with Mounts of Piety and the Apostolic Chamber, practiced banking operations such as money loans and guarantees despite the prohibition of usury.

"Whether the activities of the Knights Templar (12th century), Mounts of Piety (appeared in 1462) or the Apostolic Chamber attached directly to the Vatican , a number of operations of a banking nature (money loan , guarantee ) or a financial nature (issuance of securities , investments ) were practiced, despite the prohibition of usury"

Christian finance

[2] supported

Some financial transactions were explicitly condemned by the Church because they circumvented the prohibition of usury, and the document names the Mohatra contract as an example.

"If certain financial transactions were explicitly condemned because they circumvented the prohibition of usury (e.g. Mohatra contract )"

Christian finance

[3] supported

Charging interest on loans was treated as usury, which the Church classified as a mortal sin, creating the problem the Templars worked around.

"There was one theological problem: charging interest on loans was usury, which the Church classified as a mortal sin."

Knights Templar History: Origins, Banking System, and Fall

[4] supported

Despite the church's prohibition of usury, the Knights Templar carried out banking or financial operations.

"Despite the prohibition of usury and the Church's distrust towards exchange activities (as opposed to production activities), [ 122 ] a number of operations of a banking or financial nature are evidenced by the activities of the Knights Templar (12th century)"

History of banking

[5] supported

Changers began offering loans once their business grew, and they built the loan charges into their exchange rates. The document does not name any legal instrument or contract for this.

"Comme la taille et les opérations des changeurs ont augmenté, ils ont commencé à fournir une facilité de prêt, en comprenant les frais de prêt dans les taux de change."

Changeur

[6] supported

The Templars later provided this loan service to pilgrims travelling to and from the Holy Land. The document does not describe the legal form of these loans.

"Plus tard, les Templiers ont fourni ce service aux pèlerins voyageant de et vers la Terre sainte"

Changeur