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[Numbers]

Is it necessary to borrow money?

Are there advantages to living in debt or living debt free?

Does the Bible say anything about borrowing money?

[jimwalton]

The Bible does have some principles for borrowers:

1. The borrower is a slave to the lender (Prov. 22.7). It invites subservience to creditors (Dt. 15.6; 28.12), and creditors gain power over borrowers.
2. Borrowing has risks that are more oriented to decline than to progress (Neh. 5.3-5)
3. That doesn't mean borrowing is forbidden. Needing money from lenders is part of daily life (Ps. 112.5; Lk. 6.34-35; Ps. 37.21).
4. The Bible warns us to be in debt as little as possible and to get out of it as soon as possible.
5. The Bible's teachings on stewardship suggest some guidelines (the following 3 points are from Mary Hunt):
A. The borrower should have resources readily available to repay the debt. For instance, with a mortgage, the collateral held by the lender (the property) secures repayment of the loan. Credit card debt, on the other hand, is unsecured, and potentially immoral and dangerous. You have allowed yourself to slip into the lender’s bondage if you don’t have enough money to pay your entire credit card bill in a single month.
B. The cost of debt should be reasonable. The average credit card interest rate is 14.54%—a rate that is hardly reasonable. Carrying a debt of this sort is potentially immoral.
C. Borrowers should pay off debt as soon as possible. Long-term credit card debt, for instance, is not that type.

The Bible also has principles for lenders:

The Torah on occasion encourages lending to those in need (Dt. 15.1-7). There were several understandings about loans.

1. Being able to lend money is seen as a blessing (Dt. 28.12).
2. The preeminent principle for business was to operate with honesty and integrity (Prov. 10.3; 11.1, 3; 16.11; 20.10).
3. Any interest charged for loans was always supposed to be fair and reasonable, not usurious (Ps. 15.5). In the ancient Near East (Hammurabi), interest could not exceed 20%. In ancient Israel, common interest rates were 20-33%. In the Roman world, interest was sometimes as high as 48%. At Elephantine, interest rates as high as 60% have been found.
4. Israelites were not supposed to charge interest to other Israelites, since they were all under the covenant, but a reasonable pledge (collateral) could be secured (Ex. 22.25-27).
5. It was OK to charge interest to foreigners, but it should still be at a fair rate. Loans to foreigners were allowed but discouraged in case the foreigner defaulted on the loan (Prov. 11.15)
6. If one loaned money to the poor, one should expect never to get it back and consider it charity. If you had that much money and the other person had that little, just give it. (Prov. 11.26; 29.7,14).
7. Every 7th year, all debts were to be forgiven (Lev. 25). God established policies so that there would never be a permanent poverty class in Israel.
8. Any ill-gotten profit was considered to be wrong (Prov. 10.2; 11.18).