Should We Loan Money To Friends, Strangers?

 Can emotion override biblical wisdom? Proverbs repeatedly addresses co-signing loans. Why?

  1. As Erwin Lutzer says, “Loaning money is a trap.” Actually it traps both borrower and lender.

  2. If we feel strongly about helping them it is better to give them the money, expecting not to get it back. But first wait, ask them questions, get Bible wisdom, pray and sleep on the matter.

  3. The Bible warns against debt, borrowing and co-signing notes (Prov 17.18; 6.1; 11.15—see below). Assume that borrowers may need some financial counseling to see if there might be another way to address their issue. If one can ask us for money, we can surely ask about their financial circumstances. Banks do.

  4. Discussing their circumstances may reveal unpaid bills, unwise decisions, out of control spending, irresponsibility, character issues. More debt may be the last thing they need.

  5. Borrowers that fall behind in payments tend to hide from the lender. Family relationships can suffer greatly. Strife can enter as agreements are broken. Better to say, “Jack, I prefer to have our friendship, our closeness, rather than your bank business.” Often friends and relatives do not pay back loans as agreed, if at all! Some may see a relative as a soft touch, a Santa Claus.

  6. Friends may expect a special deal, a buddy-buddy loan—no interest and no collateral. Might this suggest his motive for coming to you?

  7. If one has good credit they can get a bank loan.

  8. Often one asking for money is already behind on his obligations. Is getting further behind wise?

  9. It’s awkward and difficult to foreclose on a bad loan if it means hurting or evicting a loved one from their home or selling their car or  boat.

  10. An experienced pastor has observed that it is tragic how big money can cause even Christians to behave.

It is poor judgment to co-sign a friend’s note, to become responsible for a neighbor’s debts.” (Prov 17.18 NLT)(Prov 11.15)

My child, if you co-sign a loan for a friend or guarantee the debt of someone one you hardly know —if you have trapped yourself by your agreement and are caught by what you said—quick get out of it if you possibly can! . . . . “(Prov 6.1-3 NLT).

About fred kerr

eating with friends, healthy food, worshipful music, exercising, nature, telling jokes
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