Question: Bob, if God does not want Christians to go into debt, does that make a home mortgage wrong? Response: Great question Peggy. Recall from several of our times together here and on the radio, you discovered that God’s Word does not prohibit borrowing. Yet, most young couples need to borrow to buy a house—they need a mortgage. The problem is that a home loan often results in what the Bible calls surety, which is taking on debt without a sure way to repay. Avoiding surety is a biblical principle; it is not biblical law. It is a biblical principle that if ignored may result in some significant negative consequences. For example, if you borrow to buy a home, then if for whatever reason, you cannot afford the mortgage payments, the bank will repossess and sell your home. If the sale price is less than you owe, you will not only lose your home, you will also need to sacrifice other assets to pay the difference between the sale price and the amount remaining on your mortgage. Ouch! So, what can you do? You can prayerfully work to avoid the consequences of surety by making certain that your home is worth more than what you owe. How? First, only borrow to buy a home based on what your cash flow will support–this means you must be living on a budget. Second, make a commitment to quickly reduce your mortgage to the point the house is worth more than you owe. Finally, get some help–do some homework to figure out how to pay off your mortgage as early as possible.
Category Archives: Borrowing & Debt
Borrow to give to your Church?
Question: I’m from a school of thought that says use other people’s money (OPM); in other words, borrow to do whatever you want. it’s a hard mentality to shake, even though I now understand it’s contrary to God’s Word. I was recently at a meeting in which fundraisers recommended that people in a congregation borrow to give to the church building program. That sounds more reasonable to me than the church itself borrowing. What do you think? Response: Larry Burkett once wrote, “If you knowingly violate biblical principles, it’s wrong, no matter how noble the purpose. I don’t believe God would direct anyone to violate His Word to accomplish His work. The principle of surety says that we’re not to borrow against an unknown contingency. The idea of using other people’s money has been greatly overplayed in our society, especially within the church. I believe that God has provided us Christians all the money necessary to do anything we want if we are committed to it. Borrowing should never play a part in giving. We should always give what belongs to us, not what belongs to somebody else.” Thank you yet again Larry! I agree–do not borrow to give to your church.
Pay Off School Loans?
Question: My husband and I have about $14,000 in undergraduate school loans still unpaid. We will accumulate about another $60,000 of debt if we go to graduate school. Do you think it would be better for us to pay off our undergraduate school loans before going to graduate school? Response: With the exception of a few chosen careers, it will be very hard, even with both of you working, to repay $75,000 in school loans. What happens if you have children and want to stay home with them? Then you would lose your income and make it even harder to pay on those loans. My personal thought is not to accumulate that much debt. One of you, preferably your husband, should go back to school part-time. Stretch out the education over a longer period of that so that, rather than accumulating so much debt, you accumulate only a minimum amount. Some graduate schools make provisions for working adults to go part-time, until they have accumulated all but one year of credit hours—then go to school full-time for one year. As a result, that total indebtedness will probably be closer to $10,000 than to $60,000 and will make it much easier to pay back those loans. Just be very careful about accumulating so much debt. It’s very hard to pay it off. In your case, it would be the equivalent of buying a small home and never being able to live in it—a very tough thing to do.
God says, “Don’t Borrow”?
Question: In reading through the Bible, I found Romans 13:8 which says, “Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law.” Does this mean that God never wants a Christian to borrow money? Response: My interpretation of Romans 13:8 is that the Apostle Paul was not referring directly to money. He was saying, don’t let people do something for you unless you’re willing to do even more for them. If Paul had been specifically telling Christians to never borrow money, I believe He would have made it absolutely clear, because then he would have been countermanding many other Scriptures that deal with borrowing money. In all of the 3,000 or so Bible verses that deal with money, borrowing or lending are not scripturally prohibited. We need to be careful not to build a doctrine out of a single verse but to take Scripture as a whole.
Should Christians Borrow?
Question: I teach a class on finances in my church, and one of my class members brought a question that I’m not sure how to answer. Can you tell me where in the Bible is says, “Neither a borrower nor a lender be”? I guess my main question is, “Should Christians borrow?” Response: First, the quote comes from Benjamin Franklin’s “Poor Richard’s Almanac.” It’s not from the Bible; it’s what Larry Burkett used to call religious folklore. To answer your second question a-la Larry Burkett, (1) the Bible very clearly says that neither borrowing nor lending is prohibited, but there are some firm guidelines. (2) Borrowing is discouraged, and in fact, every biblical reference to it is a negative one. Consider Proverbs 22:7: “The rich rule over the poor, and the borrower is the servant to the lender.” (3) The scriptural guideline for borrowing is very clear. When you borrow money, it’s a promise to repay. Literally, borrowing is making a vow. God requires that we keep our vows. Psalm 37:21 says, “The wicked borrows and does not repay.” Therefore, if we don’t want to be counted among the evil, we are to repay everything we owe. If biblical times, when a man borrowed money and couldn’t repay, he was thrown into prison, and his family was sold into slavery. When somebody gave his word and then didn’t keep it, that person greatly dishonored himself. It was worse than stealing, because a trust was violated. Just because we don’t throw people into prison today doesn’t make the trust relationship any different. Scripture shows us that we’re to be cautious about borrowing, and it should never be normal. Yet, when you look at our society today, you find that borrowing is rampant. We think it’s normal to borrow for periods of thirty to forty years or more. We have created personal and national economies that must borrow to exist. That’s not God’s way. God says in the book of Deuteronomy that borrowing is a consequence of ignoring His statutes and commandments (28:43-45).
Consolidate Your Debt?
Question: My wife and I have made a commitment to get out of debt, but we owe a lot–on credit cards and to small loan companies–and all of them come with high interest rates. Is it logical for us to consolidate those loans into one unsecured loan with a smaller interest rate? Should we consider a home equity loan? Response: Praise the Lord that He is leading you and your wife to get out of debt! And YES, it does make sense to consolidate your debts at a lower interest rate–but NOT RIGHT NOW! Here’s a sequence I suggest you prayerfully consider: (1) Develop a budget to help you make better spending decisions. (2) Commit to living on your budget for six months. (3) Work to wean yourselves from using debt to live. Consider consolidation loans only after you can live without credit so that you solve your true problems rather than simply treat the symptoms (your symptoms may be financial but your problems are always spiritual). A home equity loan may be the best interest rate you can get (shop around and check out the on-line/local Better Business Bureaus). It’s the most logical choice because you are using the equity to substitute for higher interest loans. But be certain that the loan has a fixed interest rate and not a variable or floating rate. However, you need to pray about all of this with your wife to be sure that you both agree on everything. With rare exception, most women don’t want to borrow on the equity in their homes. to them, a home represents security and comfort, not a source of money.
Borrowing from a non-Christian: Yes or No?
Question: Dr. Bob, do you believe that it’s OK for a Christian to borrow money from a non-Christian, or is that prohibited scripturally? Response: God’s Word simply says that whatever you borrow you must repay. I don’t see anywhere that God specifies whether or not it’s OK to borrow from a non-believer–it doesn’t make any difference, as far as repayment is concerned. However, a caution does appear in Proverbs 22:7 where we are told that a lender become an authority over a borrower. This might be particularly important where a church or another ministry is concerned.
Automatic Overdraft Protection–Good or Bad?
Question: We’re a young couple, and we’ve just opened our first checking account. The banker told us about a helpful service called “automatic overdraft protection.” He said if we ever overdraw our checking account, the automatic overdraft covers the deficiency. This sees like a good idea, but I know that it must have some pitfalls. Can you help us understand better? Response: BEWARE OF AUTOMATIC OVERDRAFTS! Why? Because they present two distinct problems: (1) They can encourage you not to balance your checking account because you know that you have overdraft “protection.” (2) An automatic overdraft is also an automatic loan. It comes out of a credit account, and you’re charged interest as well as a fee for using it. In my opinion, the automatic overdraft is one of the worst services in the banking industry and certainly one of the quickest sources of debt for undisciplined folks who don’t balance their checkbooks. A proverb says it well: “The naive proceed and pay the penalty” (Proverbs 27:12b).
Don’t Borrow to Give
Question: I’m from a school of thought that says use other people’s money (OPM); in other words, borrow to do whatever you want. it’s a hard mentality to shake, even though I now understand it’s contrary to God’s Word. I was recently at a meeting in which fund raisers recommended that people in a congregation borrow to give to the church building program. That sounds more reasonable to me than the church itself borrowing. What do you think? Response: Larry Burkett once wrote, “If you knowingly violate biblical principles, it’s wrong, no matter how noble the purpose. I don’t believe God would direct anyone to violate His Word to accomplish His work. The principle of surety says that we’re not to borrow against an unknown contingency. The idea of using other people’s money has bee greatly overplayed in our society, especially within the church. I believe that God has provided us Christians all the money necessary to do anything we want if we are committed to it. Borrowing should never play a part in giving. We should always give what belongs to us, not what belongs to somebody else.“ Thank you yet again Larry! I agree–don’t borrow to give to your church.
Are Credit Cards Evil?
Question: We’re a young married couple. We periodically get unsolicited credit cards in the mail. I would like to have and use some, but my husband thinks that they’re evil and that a Christian should never use them. I find it hard even to cash a check without a credit card and almost impossible to rent a car. Is it wrong to have credit cards? Response: Credit cards are not evil, and credit cards are not “the” problem! The problem is the misuse of credit cards. For example, many children see their parents use credit cards to buy clothes, gas, food, and even toys. But very few parents bring their children in when they write the checks and say, “Kids, remember when we charged all that stuff? Now we have to pay for it.” I find that while credit cards are not essential, they can be a great convenience. Let me share with you some guidelines that will help you to properly manage your cards. As a husband and wife, together, you should make some very simple vows: (1) Never use your credit cards to buy anything that is not in your budget for the month. So first, you should have a budget. (2) Pay your credit cards of every month with no exceptions. (3) The first month you’re not able to pay off your cards completely, quit using them until they are paid off in full. The second month you’re not able to pay off your cards in full, destroy them. If you follow these rules you’ll never have a problem with credit cards. (Thank you Larry Burkett!)