On my recent trip to Russia, I spoke to a business group about what the Bible says about debt and borrowing. As I wrote a few months ago, credit is a new concept to Russians, so I had to keep it pretty simple (plus, using an interpreter was a "trip" in and of itself). Since this topic was fresh on my mind, and debt is such a problem for Americans, I wanted to start my The Bible on Money series going over the five biblical principles I presented to them. Here they are:
1. The Bible does not prohibit debt. However, everywhere that debt is mentioned, it is discussed in a negative light.
The main reason for this – it makes you a servant to someone other than God.
Proverbs 22:7 says: “The rich rule over the poor, and the borrower is servant to the lender.”
When you borrow, you become a servant to a bank, a business, a family member, a friend – whoever you borrowed from. When you borrowed, they put conditions on the loan – what you can do and what you can’t do. This makes you a servant to them. We are to be servants to God and to him alone.
That’s why the Bible counsels us to avoid debt.
2. If you do borrow, you must pay back all of the debt. It is a sin to borrow and not repay.
Psalm 37:21 says: “The wicked borrow and do not repay, but the righteous give generously.”
If we don’t want to be counted among the “wicked,” we must repay any debt we owe. It really doesn’t matter if the circumstances are beyond our control. If we make a debt, we’re stuck with it. Ecclesiastes 5:5 says: “It is better not to vow than to make a vow and not fulfill it.” This is reason #2 why the Bible discourages borrowing.
3. If you do borrow, you should do so only if you have a guaranteed way to pay it back.
For instance, if you borrow to buy a car for your business, arrange the loan so that if you can’t pay for some reason, the lender can take back the car and you will be free from your debt.
If you don't do this, you're signing surety. By signing surety, we're presuming on the future. If everything goes as we expect, we’ll be able to pay the loans back. If things go wrong, as they often do, we may be left in debt. If Christians would observe this one caution associated with borrowing, the most they could lose is the security they had pledged against a loan.
This is especially true of co-signing a loan for another person. Do not do it unless you are willing and able to pay the whole amount for the person.
Proverbs 17:18 says: “A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.”
4. Do not accumulate long-term debt.
The longest term of debt God’s people took on in the Bible was about seven years. During the year of remission, the seventh year, the Jews were instructed to release their brothers from any indebtedness.
Deuteronomy 15:1-2 says: “At the end of every seven years you must cancel debts. This is how it is to be done: Every creditor shall cancel the loan he has made to his fellow Israelite. He shall not require payment from his fellow Israelite or brother, because the LORD’s time for canceling debts has been proclaimed.”
Thus, the only debts that could exceed seven years were those made to non-Jews or from non-Jews.
However, I’d encourage you to use this as the maximum length of time you’d borrow from anyone. Even if you have to take a 15-year loan, have a plan to pay it off in 7 years or less.
5. The best way not to have to borrow is to follow God’s laws and commands totally.
Deuteronomy 28:1, 12 says: “If you fully obey the LORD your God and carefully follow all his commands I give you today, the LORD your God will set you high above all the nations on earth. The LORD will open the heavens, the storehouse of his bounty, to send rain on your land in season and to bless all the work of your hands. You will lend to many nations but will borrow from none.” Borrowing is never God’s best for His people.
However, if you do not follow God’s commands, borrowing will be a curse upon you:
Deuteronomy 28:43-45 says: “The alien who lives among you will rise above you higher and higher, but you will sink lower and lower. He will lend to you, but you will not lend to him. He will be the head, but you will be the tail. All these curses will come upon you. They will pursue you and overtake you until you are destroyed, because you did not obey the LORD your God and observe the commands and decrees he gave you.”
Therefore, follow God and his commands and your need for borrowing will be minimized, if not eliminated.
Credit: Much of this information was gathered courtesy of Crown Financial Ministries.