On Debt and Borrowing

What Do The Scriptures Teach?
How Can We Apply These Teachings to Today

 by David Crank

We know that all that we have belongs to God. We are stewards to whom He has entrusted certain money and possessions. Are we good stewards of what we have been given? Are we good stewards in our practices regarding borrowing and lending?

Borrowing and lending are not new. They have been a part of life  from the beginning. In simplest form, they constitute a sharing of our possessions.   Some sharing was in the form of outright gifts. At other times something was shared with an expectation of it being returned afterwards. The shared /loaned item might be a tool, an animal, or some form of money.

But today we have complex monetary systems with many financial  innovations. Now we have home mortgages, auto loans, credit cards, etc. Large companies authorize individuals to borrow very large sums of money and to pay these back gradually over lengthy periods. The easy availability of credit has contributed to many people borrowing beyond their means to repay. Some families are  deep in debt and struggling to meet their obligations. Financial pressures from debt have contributed to divorces and to stealing or other  illegal activities. Without question there are real dangers involved with borrowing money, but does that mean we should never borrow? Under any circumstance? In any amount?  And if we have borrowed money to purchase a home or a car or for other purposes, should we now do everything possible to pay off the loans immediately? Even to the point of selling all we can and working long hours?

This is an area Lori and I have struggled with from time to time, as I am sure many of you have as well. We aspire to be totally debt free, have made great strides in that direction, but have not yet reached the goal. The purpose of this article is to share some of the insights I have gained while studying the Scriptures and attempting to apply them. It is not my intent to condemn anyone in this matter, but to share my conclusions and encourage you to examine the Scriptures and pray concerning what applications your family should make. We should all remember that though there are many commands in the Word for us all to follow, God sometimes calls us to walk slightly different paths in other matters (See  below).
God Sometimes Calls Us To Different Paths
John the Baptist was called to an extremely separated life, one in which he lived in the desert, eating locusts and honey,  and wearing a garment of camels’ hair. But Jesus was called to a life in the towns, eating normal food and drink and wearing normal clothing. 
The Recabites in Jeremiah 35 were commanded by their ancestor to never drink wine and to always live in tents. They obeyed these commands and God honored them for  doing so.  Yet God never asked all men to live only in tents and to never drink wine.
Principles Drawn From Scripture
1. Borrowing, in the broadest sense, does not appear to be sin.
Romans 13:6-8
“For for this cause pay ye tribute also: for they are God's ministers, attending continually upon this very thing. Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour. Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.” (KJV)
”For because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing.  Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor.  Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law.” (NAS}
There are plenty of verses about the foolishness of surety (guaranteeing the debts of others), but this is considerably different from borrowing. There are also warnings about the borrower becoming the lender’s slave, etc. But I find  only one verse, interpreted by some (including some teachers I highly respect) to forbid borrowing. That verse is Romans 13:8. But on the other hand there are many clear commands in both the Old and New Testaments to lend to others who are in need.

Literally translated Romans 13:8  says “owe no one anything.” On first blush that sounds like a prohibition against any sort of borrowing, even borrowing a quarter for a phone call or a tool from your neighbor. Does this  verse mean it is wrong even to borrow a book from a library? Does it mean it is wrong to borrow a car to go pick yours up at the shop or to take your child to the hospital emergency room? When applications of a verse don't seem to make sense, it is wise to take a good hard look at the verse again, in context and in light of other Scripture. It may be that your interpretation is off the mark!

Does the English word "owe" fully and accurately represent the Greek word that it translates? Does "owe" in this context include anything borrowed that has not been returned? Is every one who ever "borrows" considered guilty of "owing", in the sense of this verse?

The first seven verses of Romans 13 speak of being in subjection to the governing authorities. Paul tells us that all authority is from God and that to resist authority is to resist God. In verse six he explains our obligation to pay tribute/taxes to these same authorities. In verse 7, we are told to render to all their dues or what is due them, whether tribute/tax, custom, fear or honor. This is followed by the exhortation of verse 8  to "owe no man any thing, but to love one another".

The Greek word which is translated "dues" in verse 7, Strong's #3782 - opheile, is the plural noun meaning debt, the sum owed, or the obligation. It is derived from Strong's #3784 - opheilo, the verb meaning to owe or be under an obligation. This later word is the same used in verse 8 in “owe no man any thing”. This same word, translated as ”owe”, #3784, appears elsewhere in the NT and in Paul’s writings. It is also commonly translated in the King James as “ought”.

A debt is essentially an obligation. You are obligated, you “ought”, to return the tool that was loaned to you. With a loan, there is an expectation that it will be returned  within a certain timeframe  or whenever requested back. The obligation is to return the item when agreed upon in the same condition in which it was loaned. Not returning the item when agreed is to not meet your obligation. But keeping the item for the agreed upon time and then returning it, consititutes meeting your obligation.

We are exhorted to pay rulers their “dues” (what is owed them), such as taxes. Yet in the following verse (Rom 12:8), we are also exhorted to owe no man anything. How can we help but owe taxes to rulers? Paul is acknowledging we will owe many things to those in authority. How to reconcile this? We need to be more careful how we are using our words.

We loosely use the word “owe” to refer to both a future obligation and a current one. Within this context of Romans 13:8, Paul seems to be using “owe” to refer only to current obligations. If we do not pay our taxes when due, then we are “owing” and not meeting our obligations. If we borrow money from a friend and do not repay when it is due, then we are “owing” and have not met our obligations.

Do you now "owe" taxes for next year’s  income? Do you "owe" today the rent for the next year? Is not what you truly “owe” in these instances what is currently due? If “owe” was meant to include these future obligations then it would be impossible to “owe no man anything”.

Just as purchasing land creates a future obligation to pay property taxes and a one year apartment lease creates a future obligation to pay rent, a loan of money creates a future obligation for repayment on a certain date (or dates).  What you “owe”, in the sense of Romans 13:8, is the amount now due and unpaid, not the amount that will be due in future months and years.

I believe this passage is exhorting us to meet all of our proper obligations on time. Return your library book, return the borrowed tool, pay your taxes, rent, loan payments, electric bills, etc., when they are due - don’t delay or be negligent in meeting your obligations! Though I am not a big fan of the NIV translations’ dynamic equivalent method (because of the amount of interpretation used in the translation), the NIV version of this verse does seem to help clarify the true meaning: "Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law". Love is one debt or obligation that is due at all times and is impossible for us to completely fulfill. This debt can never be fully discharged.

Though borrowing, in itself, may not be sin, borrowing and not returning the item or paying back the money at the agreed upon time is sin. It is not meeting your obligations and not keeping your word. In retaining what was borrowed you deny its owner use of the item or money - this is not very distant from stealing! Borrowing not intending to pay back is stealing. (Romans 13:8; Psalms 37:21)
Definitions of the English Words from Webster's Unabridged Dictionary.
(Remember that the English words may not perfectly reflect the meaning of the Greek or Hebrew.)
Debt - 1.That which is due from one person to another or others, whether goods, money, or services; something owed. 2. An obligation or liability to pay or return something. 3. The condition of being under obligation to pay money to, or perform services for, another.
Borrow - to get, take or receive anything, as a loan
Loan - The act of lending; That which is lent; anything furnished for temporary use to a person at his request, on the condition that it shall be returned, or its equivalent in kind, with or without compensation for its use.

Lend - to grant a loan; to grant to another for temporary use, on the express or implied condition that the thing shall be returned, or its equivalent in kind.
Owe - to have an obligation to pay; to be indebted to the amount of.
Surety - something that makes sure, protects, or gives assurance, as against loss, damage, or default; guarantee or security;  A person who makes himself responsible for another; specifically, in law, one who makes himself liable for another's debts, defaults of obligations, etc.
2. We are responsible for returning the item borrowed on time and in its original condition.
 Whenever one borrows there is a risk that the item borrowed will be damaged or lost or that the money may not be available to repay on time. This risk does not excuse us from the obligation to repay or return the item in the condition in which we borrowed it. We may have had every intent to repay on time, but may have foolishly borrowed too much or taken risks with the borrowed amount. To the extent our negligence or foolishness was the cause of our inability to repay, we are guilty. (Ex 22:14)
3. Borrowing can sometimes be very unwise and even dangerous.
Borrowing can become a tool with which to live a lifestyle that you really can't afford. A lack of contentment with what you have, coupled with a lack of self control  can result in huge debts that you are unable to repay.  It is foolish to incur obligations which you are likely not to be able to meet. If you borrow and fail to meet your obligations, you risk suffering the consequences.  These may be having your home foreclosed on or your car repossesed, or in ancient times, yourself sold as a slave to repay the debt! Lenders can also threaten borrowers with the consequences to force them to do things they otherwise would not  (a form of slavery). (Prov 22:7) There can be bad consequences to not paying your debts when due!
4. We are commanded to both lend and give to others, particularly to meet their needs.
In many places in both the Old and New Testaments we are told to lend to others who are in need. Willingness to lend is described as a characteristic of a righteous man. We are also told to give to meet others needs. This would often seem the better course except that some in need refuse an outright gift, but will accept a loan.  In such instances we may lend, but view it from our side as a gift, with no expectation of receiving it back. There are also many instances when someone has a short term but immediate need for something we have, but which we could do without for a time. We should certainly be open to lending these (i.e. tools, equipment, extra car, etc.). (Deuteronomy 15:7-8, 11; Nehemiah 5:10; Psalms 37:25-26; 112:5-6; Matthew 5:42; Luke 6:34-36)
5. The Jews were commanded not to charge interest to their countrymen.
As the Jews were forbidden to charge interest to their countrymen, we should consider whether we should likewise forgo interest on money loaned to family and  Christian brethren. I find no clear Biblical instruction on this, but seeing how strongly interest from countrymen was forbidden to the Jews and knowing what a burden compound interest can become, I strongly suspect the Lord is more pleased when we forgo the interest. (Exodus 22:25-26; Leviticus 25:35-37; Deuteronomy 23:19-20; Nehemiah 5:7,10; Ezekiel 18:8,13)
6. Obligating yourself for someone else's debt is unwise.
 It is generally very unwise to obligate yourself to make good on someone else's debts and obligations (surety). It is particularly foolish to do so for someone you do not know or who is not a very close friend or family member. Guaranteeing another's debt encourages unwise borrowing and may tempt him not to make every effort to repay (since someone else will suffer the penalty rather than himself). (Prov:1-5; 11:15; 17:18; 20:16; 22:26-27)
7. It is a blessing from God to be able to lend and not to have need to borrow.
One type of blessing from God is to have much you can give or lend to meet the needs of others but to have no need to borrow from others  yourself. (Deut 15:6)
8. We do not know what tomorrow will bring, therefore we must be very cautious about debts we might be unable to repay.
The larger the amount and the longer the period over which repayment is due, the greater the risk that our circumstances may radically change and we may at some point be unable to pay when due. Therefore it is wise to borrow as little as possible and pay off as quickly as possible. Less financial obligations stretching into the future can reduce stress and worry and provide more flexibility in case of sudden job loss, bad economic times, or financial emergencies. (Prov 27:1; Jas 4:13-16)
9. Being financially debt free is a worthy goal, but should not be your highest goal.
Being debt free, in the sense of having no monetary debts owed to lenders, can be a very worthwhile family goal, but should not be your highest goal. If eliminating financial debts becomes too large an obsession, you may end up sacrificing your family for it. Our money is NOT the most important aspect of our lives!
Applying Principles to Modern Reasons for Borrowing Money

Purchase of a home.
With the high cost of most homes today, purchasing a home without incurring a mortgage is very difficult. It may take many years to save enough to purchase a home outright. So what to do?
Some suggest renting rather than buying. Renting is a good solution for some, but has shortcomings. Rents can be nearly as high (or higher) than mortgage payments but without ownership. A monthly rent obligation is not a great deal better than a monthly mortgage payment - both are debts in the sense that you are obligated to pay an amount every month. If you cannot pay, you will lose your home. But the mortgage is an ongoing obligation, whether you leave your house or not. If your house cannot be sold for enough to cover your remaining debt, then you will still be owing. Renting is often a very good solution when you do not expect to live somewhere for many years. If you were to buy and then sell only a few years later, the one time purchase costs can easily result in a loss.

Some suggest first saving for a few years to make as large a down payment as possible and then borrowing the remainder.  Then  taking a shorter term loan (15 years or less) and/or paying down the loan more rapidly than required. This reduces overall interest costs and allows the mortgage to be  paid off as quickly as possible. Depending on interest rates, the monthly payment for a 15 year loan can be much less than two times the payment on a 30 year loan. The interest savings are huge! Buying a little less expensive house with the shorter term loan can get you out of debt in half the time and saves you a great deal of money.

Another approach is to save for a time and then buy a home that minimally meets your needs, but which is well suited for future expansion and improvement, as you have funds.

A similar alternative is to save up enough to purchase some land and a small mobile home. Then over a number of years gradually build a new home for yourself, as you have funds for materials and time to build. Since perhaps half the cost of a home is in the labor, building as much as possible yourself (with some help from family and friends) can save you a lot! Also much of the money you formerly paid for rent can be used to buy materials for building.

Others have suggested that parents  should assist their grown children in buying their first home. If Mom and Dad already own their home outright and have significant savings that could be either given or loaned interest free, this is great. However for most of us, this may not be very workable as available savings are low and the number of children needing help may be high.
Second to a home, the largest purchase many of us make is an automobile. With prices for new cars easily running to $15,000 - $25,000, this can be a very significant purchase! For many, it can take quite a while to save up this amount. Auto loans are  commonly available over 3-5 year periods. Shorter periods keep the total interest cost down, but you can still pay a lot of interest. Though we would all prefer to save up the money and purchase our autos outright, this is sometimes difficult. Depending on where you live and work, a car can be very necessary. And though we may be saving to replace an older car, we can very suddenly and unexpectedly end up without a vehicle due to accident or major breakdown. As with a house, if you borrow, borrow little and pay back fast to reduce your interest costs and risks of not being able to repay.

Auto loans can be avoided or minimized by: 1) buying a cheaper car, a good used car or otherwise lowering the required purchase amount; or 2) leasing rather than buying (many of the same disadvantages to renting a home); or 3) doing without or borrowing a spare car from someone else for a limited period while you save your money. Knowing that autos must be replaced at some regular frequency, it is wise to save up money regularly for future auto purchases.

Credit Cards.
Credit cards can be a huge convenience. They allow you to make one payment for many bills, to buy over the telephone or internet,  and can provide emergency funds in a  crisis (i.e. traveling and running out of  cash, critical breakdowns before your next paycheck, such as A/C breakdown in 100 degree weather; refrigerator dies, major auto repair needed so you can get to and from work, etc.).

However, credit cards can also be very dangerous. If you charge only what you can afford to pay and pay in full every month, just like you pay your electric bill, then all is well. But it is easy to charge much more than you can afford to immediately pay and then incur high interest charges, increasing your indebtedness! Without good record keeping and self control, credit cards can get you into a lot of debt that you might have a very hard time paying off. My advice: only use credit cards if you have the self control and discipline to not overspend and then always pay the entire balance off each month, on time or before.

Though you may intend to pay the entire balance each month, there is always the possibility of unforeseen circumstances forcing you to carry over a balance for one month. If you are using the credit card wisely, this should be very rare. If it happens repeatedly you are probably losing control and need to cease using the card altogether before you get yourself into a lot of trouble.
Weddings, Vacations, Appliances.
It is much preferred to save up money in advance for things such as these. You should expect children to get married and appliances to break down and try to be prepared. But when you have failed to save up adequately and the time has come for a marriage or a crisis appliance purchase…  If you choose to borrow, I would suggest looking hard for ways to save money to minimize your debt. Don't get caught in a substantial long term debt!  When it comes to expensive vacations, I think you would do better to forgo these until you have money in hand.
College / Vocational School for Your Child.
This becomes a major source of debt for many people. First  decide whether college is really the best thing for your child. If you expect it will be and believe that you should pay for it, then you had better start saving a lot of money early! If you must borrow money, don't multiply your debt by choosing expensive schools - it is generally not worth it! Look at ways to reduce the cost by: having your child live at home and commute to school, requiring your child to work and pay for as much of the expense as possible, etc. Also, be sure your child is going with a clear direction and is serious about the education. It is real shame to see parents saddled with debt while their child drifts from one major to another, running up the bills without solid progress towards a degree. [See the article in issue #2 on Should You Send Your Child to College.]
Business Needs.
For those who own a business, particularly a capital intensive one, this can be a difficult issue. Having few or no business debts removes a significant burden than can make all the difference in the survival of a business. However, the problem remains of how to purchase needed equipment, raw materials, inventory, etc. These things are very hard to save sufficiently for until the business is doing well enough to pay for them. The need for debt can be reduced by getting others to invest in the company, but at the cost of sharing the ownership and the profits with the investors. As much as possible, it seems good to me to try and structure your business to really minimize expenses and attempt to finance as much as possible out of the proceeds of the business itself.
All that we have belongs to God. Whatever money He has given into our hands, we are to be good stewards of it. Part of serving God with our money is being willing to share with others who are in need, both by giving and lending. Though the Scriptures do not condemn borrowing and seem to assume that we will at times borrow some things from others, yet there are warnings about borrowing and not being able to repay at the agreed on time. It is sin to purposely default on your obligations. It is foolishness to put yourself at significant risk of not being able to repay what is due. It is a blessing to not need to borrow and to be able to give and lend to others. Avoiding monetary debts is a worthy goal, but it is a less important goal than many others. Be careful that your zeal to eliminate all financial debts does not cause you to sacrifice more important goals.

Perhaps you have been taught differently concerning borrowing and debt. Perhaps you have studied this matter closely and reached a different conclusion than I have. If so, I simply urge you to examine the Scriptures carefully for yourself and become fully convinced in your own mind. Keep open to new insight and correction from the Lord, and keep your motives fixed on pleasing Him rather than men. And don't be quick to condemn brothers and sisters who may have reached a slightly different conclusion in a matter. I will strive to do the same!  "The faith which you have, have as your own conviction before God. …" Romans 14:22
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