This is Part 2 of our “What the Bible Has to Say About Money” series. Click here to read Part 1.
In Part 1 of this mini-series on the “Bible and Money” we discussed how God views money (spoiler alert: he doesn’t hate it), and how He expects us to approach work and wealth. In today’s post, we shift our focus to the Bible’s perspective on debt.
Let me begin by making it clear up-front that there is no shadow of a doubt that debt has a dark and dangerous side. The bondage and stress that debt brings has shattered many homes and marriages. Many Christians who are rightfully concerned with the dangers that debt brings will, therefore, tell others that it’s a sin to borrow.
But is this is what the Bible teaches? What exactly does the Bible have to say about debt?
The Bible doesn’t say it’s a sin to go into debt.
Yes, go ahead and do a double take, and confirm that you did read that right.
The fact of the matter is you won’t find a specific verse to prove that debt is a sin. Now, before you jump down to the comments to tell me what an awful Bible scholar I am, let me continue. I’m not here to defend debt; I’m just here to fairly explain what the Bible has to say about it.
Isn’t it interesting that many of the preachers and teachers that say it’s a sin to go into debt, oftentimes say something to the effect of: “It’s a sin to go into debt. That’s why I don’t have any debt in my life but my home.”
So…it’s a sin to go into debt…except for when it’s not?”
Do you see the problem, here? For those reading this who are Christians, we must be careful not to fall prey to subtle hypocrisies.
But while the Bible doesn’t explicitly say that it’s a sin to borrow, it does offer quite a few warnings about the ill-effects of having debt in your life.
Let’s take a look at four biblical facts about debt.
1. The borrower is a slave to the lender.
Proverbs 22:7 – “The rich ruleth over the poor, and the borrower is servant to the lender.”
Deuteronomy 15:6 – “For the LORD thy God blesseth thee, as he promised thee: and thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt reign over many nations, but they shall not reign over thee.”
This verse reveals to us one of the most basic truths about debt: the moment you go into debt, you lose a little bit of your freedom.
One of the reasons I started this blog was so that I could help men and women to become financially independent. Why does this mean so much to me?
Because when you are financially independent, you then have the power to live your life however you choose.
- If you want to retire early, you can.
- If you want to change careers, you can.
- If you want to go into some form of ministry or volunteer work, you can.
There is no greater enemy of financial independence than debt.
Whether the lender is the credit card company, the mortgage company, the car dealership, the furniture store, or a friend down the street, when you borrow from them, they own a piece of you.
This takes a toll on us – not only financially, but also emotionally.
Talk to anyone who has tried in vain to ignore the calls from the collections agency, or someone who has lived in fear of having their car repossessed, or the couple who has begged the mortgage company not to foreclose on them, and any of them will attest to this truth.
And lest you think that the way to avoid these issues is to just borrow from friends and family, think again.
There may be no greater emotional burden that you could place on yourself than knowing that you are unable to repay someone who actually knows you. There have been many a close friendship and many a family that has been broken up due to the anger and frustration that came from a debt that was not repaid.
2. We must repay our debts.
Psalm 37:21 – “The wicked borroweth, and payeth not again: but the righteous sheweth mercy, and giveth.”
God is clear in Scripture that it is morally wrong to default on our debts. Whenever possible, we should seek to repay what we have borrowed.
So, what does this tell us? While it might not be a sin to borrow, it is a sin to leave our debts unpaid. For this reason alone, we should avoid debt as much as possible.
You may think you can repay what you’ve borrowed now, but what if circumstances change in the future? Better to wait and pay cash for what you want. If you didn’t borrow for the item, then there is no risk of you defaulting on a loan for it.
3. Debt rarely passes the “stewardship” test.
Luke 16:2 – “And he called him, and said unto him, How is it that I hear this of thee? give an account of thy stewardship; for thou mayest be no longer steward.”
In my post, “What the Bible Has to Say About Money,” we covered the principle that God is the owner of everything, and we are simply His stewards (managers). God expects us to be wise managers over everything that He has entrusted us with, and to never be wasteful.
Luke 16:1 – “And he said also unto his disciples, There was a certain rich man, which had a steward; and the same was accused unto him that he had wasted his goods.”
I can think of very few financial practices that are more wasteful than paying interest on purchases.
The average credit card debt in America is near $7,000. Assuming an interest rate of 15%, if you only made the minimum payment ($140), it would take you 79 months (over 6 ½ years) to pay off the debt, and you would pay over $4,000 in interest!
And that’s if you never bought another item on credit! This is over $4,000 spent needlessly! This is not being wise stewards of the money that God has given us.
About the only thing that you could possibly say would not be bad stewardship to pay interest for would be your home. Why? Because homes consistently increase in value over time.
But, even so, the less interest you can pay on your home, the better!
4. It’s foolish to co-sign on someone else’s debt.
“If you cosign for a car, the lender will not contact you when the loan is paid late every month, but your credit is damaged every month. The lender will not contact you before they repossess the car, but you now have a repo on your credit report. And they will contact you to pay the difference between the debt and the below-wholesale repo price they got for the car.”
- But, instead, you’re just teaching them to take short-cuts.
- For their long-term good (and yours), it’s better that they patiently save the cash for the purchase, or build up enough of their own credit to qualify for the loan on their own.
If you are determined to help a young person with a purchase, then I suggest one of two options:
- Give them the money for the purchase personally as a gift.
- Lend the money to them personally, and have them repay you.
However, never choose option 2 unless you can easily financially withstand never seeing that money again.
If your financial security depends on a particular loan being repaid, then you shouldn’t make the loan.
In your own mind, you should view the money as being gone for good, and consider it a bonus if you happen to be repaid. This will protect you from disappointment and possibly a broken relationship.
One final note: if someone else has co-signed a debt for you, you now understand what a precarious position they have placed themselves in.
It’s important that you make it your utmost priority to send every payment on time and in full until the entire loan has been repaid.
Conclusion:
The Bible may not explicitly call debt a sin, but it does make it clear that it has a lot of downsides. Personal finance experts and the Bible both agree that steering clear of debt is a smart move that you’ll never regret.
Thank you! I had a very good friend tell me that I committed a sin by taking out a small loan to help cover my last two semesters of college. I went to a rather expensive Christian liberal arts university, and both myself and my parents worked our behinds off to save and scrimp and sacrifice to get me there because we knew it was where God wanted me. I always made payments on time, and when I got a full time position in my profession a couple of years after graduation, I started paying extra toward the principle, and had it payed off really really early. I wouldn’t trade my time at that school for anything. Best experience of my life. It made me who I am today, and I know without a doubt it was exactly where I was supposed to be. My friend told me I should have taken a couple of years off, and saved up enough and then gone back to avoid the sin of debt.
Glad to hear that the article was an encouragement to you! It’s easy to label any decision that has its fair share of downsides as “sin.” But I’m glad to hear that you were able to tell the difference and you didn’t let your friend’s wrong advice keep you from pursuing your dream. And I’m glad to hear that your college degree helped you get a full-time job! Congrats and thanks for reading!