Principles of borrowing appear in God’s Word, although it should be noted that principles differ from laws.
A principle is an instruction from the Lord to help guide our decisions. A law is an absolute. Negative consequences can result from ignoring a principle, but punishment is the likely consequence of ignoring a law of God.
An example that shows the difference between principle and law: the principle of borrowing given in Scripture is that it is better not to borrow if the loan must be taken with surety. “A man lacking in sense pledges and becomes guarantor in the presence of his neighbor” (Proverbs 17:18).
The law of borrowing given in Scripture is that it is a sin to borrow and not repay. “The wicked borrows and does not pay back, but the righteous is gracious and gives” (Psalm 37:21). The implication of this Scripture is that the wicked can repay but will not, as opposed to those who want to repay but cannot.
Principles are given to keep us clearly within God’s path so that we can experience His blessings. To ignore them puts us in a constant state of jeopardy in which Satan can cause us to stumble at any time.
Principle 1: Debt is not normal
Regardless of how it seems today, debt is not normal in any economy and should not be normal for God’s people.
We live in a debt-ridden society that is now virtually dependent on a constant expansion of credit to keep the economy going. That is a symptom of a society no longer willing to follow God’s directions. God told His people what He would do if they kept His statutes.
“Now it shall be, if you will diligently obey the Lord your God, being careful to do all His commandments which I command you today, the Lord your God will set you high above all the nations of the earth?.The Lord will open for you His good storehouse, the heavens, to give rain to your land in its season and to bless all the work of your hand; and you shall lend to many nations, but you shall not borrow”
(Deuteronomy 28:1, 12). Borrowing is never God’s best for His people.
Principle 2: Do not accumulate long-term debt
It’s hard to believe that a typical American family accepts a 30-year home mortgage as normal today or that it is now possible in some cases to borrow on a home for nearly 70 years.
The need to expand the borrowing base continually forces longer mortgage loans, because expansion through taking on debt causes prices to rise through inflation. As prices rise, mortgages lengthen.
Today it requires from 40 to 70 percent of the average American family’s total income to buy an average home, even with a 30-year mortgage.
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 (see Deuteronomy 15:1-2). Thus, the only debts that could exceed seven years were those made to non-Jews or from non-Jews.
Principle 3: Avoid surety
Surety means accepting an obligation to pay without having a guaranteed way to make the payments.
The most recognizable form of surety is cosigning a loan for another person. But surety also can be any form of borrowing in which an unconditional guarantee to pay is committed.
The only way to avoid surety is to collateralize a loan with property that, if sold, would cover the indebtedness, no matter what.
Currently Americans charge in excess of $400 billion annually on their credit cards, of which $50 billion or more is for annual finances charges, and they carry an average monthly balance of between $3,000 and $5,800 at 12 to 21.5 percent interest.
These credit card purchases have become the most common form of surety in America today. In a credit card transaction, one merchant sells a consumer a product and another finances the purchase, unless the credit purchase is with an in-store credit card.
In the event of a default, the return of the merchandise to the original merchant does not cancel the debt because the finance company has no interest in the merchandise purchased.
Principle 4: The borrower has an absolute commitment to repay
In this generation, situational ethics is widely accepted — so much so that it’s easy to rationalize not paying a debt, especially when the product or service is defective or when family financial situations seem to be out of control.
Unfortunately, many borrowers discover that it is possible for them to accumulate far more debt than they can repay and still maintain the lifestyle they want. As a result, they bail out.
Currently (2002 standards) over one million people a year now choose bankruptcy as a way to postpone or avoid repayment.
Nevertheless, in some cases voluntary bankruptcy is acceptable — but only in the context of trying to protect the creditors, never in the context of trying to avoid payment.
A Christian needs to accept that God allows no exceptions to keeping vows. “It is better that you should not vow than that you should vow and not pay” (Ecclesiastes 5:5).
Benjamin Franklin’s Poor Richard’s Almanac quotes, “Neither a borrower nor a lender be.” Although it is good common sense, it is not from God’s Word.
However, many Christians feel that all borrowing is prohibited according to Romans 13:8, “Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law.”
To properly interpret this Scripture, it must be considered in light of the context in which it appears. In this particular reference, Paul was talking specifically about money — teaching that we are never to allow people to do things for us if we are not willing to do even more for them.
Scripture very clearly says that neither borrowing nor lending is prohibited, but firm guidelines are given.
Borrowing is discouraged and, in fact, every biblical reference to it is a negative one. “The rich rules over the poor, and the borrower becomes the lender’s slave” (Proverbs 22:7). The scriptural guideline for borrowing is very clear. When you borrow, you promise to repay. Literally, borrowing is making a vow and God requires that we keep our vows.
Reprinted with permission from Crown Financial Ministries, www.crown.org.