Here are some Scriptures that deal with a believer and debt. Let’s review them first and then I will give some thoughts on how to interpret.
Do Not Borrow:
(Romans 13:8 NKJV) Owe no one anything except to love one another, for he who loves another has fulfilled the law.
(Proverbs 22:7 NKJV) The rich rules over the poor, And the borrower is servant to the lender.
(Deuteronomy 15:6 NKJV) For the LORD your God will bless you just as He promised you; you shall lend to many nations, but you shall not borrow; you shall reign over many nations, but they shall not reign over you.
(Deuteronomy 28:12 NKJV) The LORD will open to you His good treasure, the heavens, to give the rain to your land in its season, and to bless all the work of your hand. You shall lend to many nations, but you shall not borrow.
Do Not Be a Surety:
(Proverbs 6:1 NKJV) My son, if you become surety for your friend, If you have shaken hands in pledge for a stranger,
(Proverbs 17:18 NKJV) A man devoid of understanding shakes hands in a pledge, And becomes surety for his friend.
(Proverbs 22:26-27 NKJV) Do not be one of those who shakes hands in a pledge, One of those who is surety for debts; If you have nothing with which to pay, Why should he take away your bed from under you?
When looking at these Scripture, what is the definition of debt? If this is a strict admonition against borrowing money, then why are there rules (e.g., Exodus 22:25) for lending money to God’s people? In addition, in Psalm 37:21 it tells us that the wicked are those who borrow and do not repay. So what about those who borrow and do repay? It would seem that they are not categorized in with the wicked. Also, Psalm 37:26 it says that the merciful lend. But would we be merciful to lend if borrowing were strictly prohibited? So I believe we must be careful in our interpretation and application of these Scriptures.
Let’s take a quick look at the Hebrew word, lavah, which is translated borrow and lend. It appears to have a connotation of one who is joined with another. In fact that is one of the translated English words of lavah. In Gesenius’s Lexicon it also gives a sense of a debt where repayment would result in being put into slavery. Indentured slavery was a common practice in that time. Where a creditor took a debtor on as a slave until the account was paid.
It would be easy to say that since that isn’t a practice today then it doesn’t apply. But I would not go that far. I know many people who are so much in debt that they are not free. Their debtors are ever present on their mind. They are not free to spend time with their families because they have to work two or three jobs to pay the bills. Now I commend them for being honorable and repaying the debt (c.f., Psalm 37:21). However, it does seem that their creditors reign over them (c.f., Proverbs 22:7 and Deuteronomy 15:6.
I believe the admonition to not borrow is a good one. In the context that I see in the Scriptures, I would make a distinction between borrowing and financing. What does that mean? Well I would say that you have borrowed when there is no asset of sufficient quick sale value to pay the debt. And you have financed something when the underlying quick sale value of the asset is greater than the loan. So if I go buy a new $20,000 automobile and borrow $20,000 for the purchase, then that is borrowing. Why? Because as soon as I drive it off the lot, it becomes a used car and is now worth several thousand dollars less (let’s say $17,000). So if for some reason I lose my job and cannot pay the monthly payments and they come and repossess the car, I will still owe several thousand dollars.
However, if I only took out a loan of $10,000 to buy the car and put $10,000 down, then in the above circumstances, I will probably be able to make a quick sale of the car more than the underlying loan. This is the theory behind the down payment on the purchase of a house. You put 20% down, as your investment into the house. In a stable economy, you would think you could sell the house for more than your underlying mortgage. Of course, at the time I write this (June 2009) in Orange County, California, there are a lot of people who are upside down on their houses, due to the poor economy and the crash in real estate value.
So to summarize, I think we can see the great wisdom in the Scriptures telling us to not borrow money.