Why I Believe it is Permissible to Borrow Money
We recently celebrated the early retirement of a debt we incurred to purchase our office building and to expand our facilities to make room for all the children who are present at Bridgeway. Some people wondered whether or not it was biblical for us to take out a loan. They suggested we should not undertake the renovations until we had all the money in hand. I appreciated their concerns but was not convinced that it was unbiblical to borrow money.
The most helpful article I found on this was written by John Piper, based on his sermon, “How the Elders of Bethlehem Baptist Church Decided That It Was Biblical and Wise to Borrow Money to Purchase the North Campus,” preached on July 27, 2005. I have made use of this article in formulating my own response to this question, which you can read below.
In Romans 13:8a the Apostle Paul says, “Owe no one anything, except to love each other.” Does this text, together with others, rule out all borrowing, whether in the form of a mortgage for a house, a loan for a car, or a neighbor’s lawn mower? I don’t think so. Here are some other texts on the subject:
“The rich rules over the poor, and the borrower is the slave of the lender” (Prov. 22:7).
“[The sojourner who dwells among you] shall lend to you, and you shall not lend to him. He shall be the head, and you shall be the tail. All these curses shall come upon you and pursue you and overtake you till you are destroyed, because you did not obey the voice of the Lord your God, to keep his commandments and his statutes that he commanded you” (Deut. 28:44-45; this is part of the list of curses for disobedience).
“The Lord will open to you his good treasury, the heavens, to give the rain to your land in its season and to bless all the work of your hands. And you shall lend to many nations, but you shall not borrow” (Deut. 28:12; part of the list of blessings for obedience).
Clearly it is good to be in a position where you do not have to borrow. But does that mean that all borrowing is unwise or unbiblical?
(1) If we were to take Romans 13:8 as absolute and unqualified it would put us in conflict with texts that instruct us on how to lend. After all, if you lend you become complicit in someone’s borrowing.
“[The righteous] is ever lending generously, and his children become a blessing” (Ps. 37:26).
“It is well with the man who deals generously and lends; who conducts his affairs with justice” (Ps. 112:5; see also Exodus 22:25; Deut. 28:12; 23:19).
Look again closely at the larger context of Romans 13:7-8 –
“Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed. Owe no one anything, except to love each other, for the one who loves another has fulfilled the law” (Rom. 13:7-8).
Verse 7 appears to say it is right to “owe” taxes, revenue, respect, etc., provided that we “pay” what is owed. As John Piper put it: “Yes, when you have a debt, pay it. End your obligations each time they arise. Every time the bill comes in the mail, pay it and be done with it so that it is not owed anymore. Except in the case of love! Never end that obligation. When you pay your bill (or your mortgage payment!) you are done with it until another comes. You have kept your obligation. But when we have loved someone, we are just as much in debt to love them again immediately as we were before—or we should be!”
(2) The biblical warnings about the dangers of debt describe what may happen but not what must happen. They usually depict the exploitation of the poor by the rich. Our circumstances are different.
For example, from Proverbs 22:7 we do not conclude that the rich “always” rules over the poor or that the borrower is “always” the lender’s slave. It may happen, and therefore we need to be careful. But it need not happen. The warning is to keep ourselves from the kind of poverty that makes us dependent on the rich for life.
Ask yourself these questions: Am I poor, at least by biblical standards? Am I borrowing out of distress or deprivation, or is it part of a strategic plan and from a position of economic strength. What is the potential for you to default on the loan? Do you find yourself in that position envisioned in Scripture where warnings against incurring debt are found?
(3) There are several texts that condone and regulate lending and borrowing.
In Matthew 25:27 Jesus rebuked the man who squandered his one talent, telling him he should have “invested my [Jesus’s] money with the bankers, and at my coming I should have received what was my own with interest.” Would Jesus have used this illustration if he believed that it was wrong to invest money with banks that pay interest and make loans to earn the money to pay the interest? I don’t think so.
See also Deuteronomy 15:7-8; 24:10; Exodus 22:14; and 2 Kings 4:3.
(4) The biblical opposition to charging interest is neither absolute nor a condemnation of banking in general but was a warning against profiting personally and excessively at another’s (typically the poor) expense.
We must remember that Israel’s society was not based on a complex commercial and financial structure. Theirs was not a free market capitalist society. Loans were made almost exclusively to alleviate poverty. They were charitable in purpose and not designed to be used for capital investment. To charge excessive interest on such loans from a fellow Israelite would serve only to aggravate the person’s poverty. Thus there is nothing wrong with institutions charging interest on loans.
Does borrowing put you at any undue risk? Is the asset you borrow to buy always there to be sold to repay the loan? Be certain that you are not be doing what the Bible calls foolish, namely, giving up something life-sustaining as collateral. Are there ways you could continue to flourish and meet your obligations if you had to sell your property to repay the loan? In other words, be sure that borrowing money does not fall under the condemnation of presumption (like jumping off the temple) or failing to count the cost.