The Bible has some strong things to say about debt. In the total witness of the Bible, is all debt considered sinful? Or can we differentiate between types of debt, and say that some are lawful while others are not? If there is debt that is considered lawful, can we further distinguish a type of debt that would also be wise (or at the very least, not unwise) to engage in, given the right circumstances?

See related questions on Biblical Hermeneutics: Does Romans 13:8 include a prohibition of taking loans? and What are the proverbs about giving collateral for someone else teaching about loans?

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    Do you have a preferred perspective for this? The positions are certainly varied (although it may not be along doctrinal lines). I'm not sure this is constructive in it's current form.
    – wax eagle
    Sep 29 '12 at 3:13
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    @waxeagle What I'm interested in is a defence which explicitly and rigorously appeals to Scripture. I don't want to drill down on a particular denomination; I want it to be open to anyone who wants to take a shot at it.
    – Kazark
    Sep 29 '12 at 4:55
  • @Kazark - Great question. I saw the others at BH as well. It has been a while since I thought about this one, but I recall the scriptures present a difficult arena to derive a smooth theology. If nobody nails down good answers I will try and dig out some stuff, otherwise enjoy reading the answers. I know Luther took an extreme view on it, but many olde theologians would have never imagined student loans and mortgages would become an essential part of trying to survive in this world.
    – Mike
    Sep 29 '12 at 7:03
  • Would an appeal to Doctrines and Covenants as an authoritative guide to interpreting the Protestant canon on this issue make a valid answer here?
    – Caleb
    Sep 29 '12 at 8:36

This is a very large subject that might be too big for an answer but I will make an attempt anyway. I apologize for the length.

I think the answer to the question can be almost fully derived by this fairly long section of scripture, so I quote it all:

1At the end of every seven years you must cancel debts. 2This is how it is to be done: Every creditor shall cancel any loan they have made to a fellow Israelite. They shall not require payment from anyone among their own people, because the Lord’s time for cancelling debts has been proclaimed. 3You may require payment from a foreigner, but you must cancel any debt your fellow Israelite owes you. 4However, there need be no poor people among you, for in the land the Lord your God is giving you to possess as your inheritance, he will richly bless you, 5if only you fully obey the Lord your God and are careful to follow all these commands I am giving you today. 6For the Lord your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you.
7If anyone is poor among your fellow Israelites in any of the towns of the land the Lord your God is giving you, do not be hardhearted or tightfisted toward them. 8Rather, be openhanded and freely lend them whatever they need. 9Be careful not to harbor this wicked thought: “The seventh year, the year for cancelling debts, is near,” so that you do not show ill will toward the needy among your fellow Israelites and give them nothing. They may then appeal to the Lord against you, and you will be found guilty of sin. 10Give generously to them and do so without a grudging heart; then because of this the Lord your God will bless you in all your work and in everything you put your hand to. 11There will always be poor people in the land. Therefore I command you to be openhanded toward your fellow Israelites who are poor and needy in your land. (Deuteronomy 15:1-11, NIV)

It may seem odd to appeal to Mosaic legislation to understand the Christian view of debts and our obligations under them, but in many ways all Christian principles are first inlaid in the Old Testament. From the verses above we can conclude two principle aspects about debts under a Biblical framework:

  1. Both lending and borrowing are not condemned, but actually encouraged when the poor need temporary help. This is a peculiar case of a law for an agricultural society who shared the land God was giving them. Therefore, we can imagine if a neighbor suffered providential loss, due to bad weather affecting their crops, etc., a neighbor might loan his own seeds, tools, etc., recognizing that he may too need help at another time.

  2. It is not moral to take advantage of the poor through a loan, as the principle was to forgive the whole loan, where it could not be repaid after seven years.

From these two aspects the church at a very early age condemned what was called 'usury'. Usury did not mean a high interest loan, but almost any kind of interest on 'money'. Interest was not the same thing as 'usury' but if the lender did not in some way take on risk in a loan, then it was considered usury. An excellent article on the history of interest including church views can be found at A Brief History of Interest, Dr. Jurg Conzett. The basic idea that has floated around the subject relates to the history of the world changing from an agrarian society to a capitalist trading society. When we think about it it makes sense. In the early days, such as under Moses, if you needed some seed to survive, a neighbor might lend some of his seed, or land. They did not necessarily have silver coins, so the payment for seeds would be seeds from a successful crop. It would be easy to pay a bit of interest as one seed would produce hundreds of seeds. In this way early lending was fair and the lender assumed risk, because if there was no crop, a payment could not be made, and after seven years the whole thing must be forgiven. Even Aristotle argued against interest on silver, saying that it did not naturally increase as did seed.

We can see these principles applied under the Mosaic law for among brother 'no interest was allowed' but interest was allowed for loans to foreigners:

Do not charge a fellow Israelite interest, whether on money or food or anything else that may earn interest. You may charge a foreigner interest, but not a fellow Israelite, so that the Lord your God may bless you in everything you put your hand to in the land you are entering to possess. (Deuteronomy 23:19-20, NIV)

However, even for a foreigner the interest could not be a kind of 'usury' that exploited the poor, as:

“Do not mistreat or oppress a foreigner, for you were foreigners in Egypt. (Exodus 22:21, NIV)

To apply this basic ethic to today, or with the New Testaments command that 'Let no debt remain outstanding, except the continuing debt to love one another' (Romans 13:8) we can draw the same principles under the gospel light.

First, any loan by a person in need is lawful, in order to help the person make a living and take care of his own family. Second, such a loan should be provided for without exploitation. Yet we live in a wicked world, so this is not always possible as that would pretty much end all credit-card usage today as they all charge high interest especially among the poor!

As the New Testament is not under a government of God's people following God's laws in Canaan but an invisible church in a wicked world, the New Testament seems to focus more on charity, rather than loans by Christian love, as well as Christian duties for those who have debts in this wicked world. Therefore, for those with debts, the command is to not forsake the obligation of paying them, but work hard at being faithful to our commitments. It also implies that we must not enter into debt unless necessary:

The wicked borrow and do not repay, but the righteous give generously (Psalms 37:21, NIV)

The only way we can really determine what debts or lawful, is not under a legalistic rule, but under the rule of love, which must define all principles of godliness. The question we should ask ourselves when entering into a debt obligation is: 'Can we truly incur and repay this loan, without causing anyone harm?' If the answer is no, then the debt is not lawful, for love is the law.

A student loan, to become employed and a productive member of society would naturally be a good debt, for without such many could not earn income for a family or support church ministries and other charities later in life. A loan to borrow from your next years predicted savings, to go on a vacation because you are stressed might not pass the rule. The New Testament drives the idea of obtaining an 'independence' and respect from the outside world, which is included in working towards having no debts, where possible:

And to make it your ambition to lead a quiet life: You should mind your own business and work with your hands, just as we told you, so that your daily life may win the respect of outsiders and so that you will not be dependent on anybody. (1 Thessalonians 4:11-12, NIV)

I myself once took a loan to pay for expenses necessary to adopt an orphan. I would consider that a good loan. The question we must ask ourselves when considering to take on a loan, is: 'Do we really need now what we want the loan for, for the benefit of ourself, our family and our brother?'

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    Long answers are only a problem when they are needlessly verbose (which this is not) or when the reader is not interested (which I am!). Otherwise, the detail is great—which is exactly the case in this informative and helpful answer. +1
    – Kazark
    Sep 30 '12 at 20:44
  • Although Deuteronomy 23:19-20 says we may lend to strangers. Proverbs 11:15 plainly states that borrowing from strangers is not wise.
    – dongle26
    Oct 1 '12 at 0:18
  • @dongle26 -That proverb seems to be saying it is unwise to loan or make a deal with a possibly untrustworthy stranger, but borrowing form an untrusted source would also be unwise, as untrusted sources often have 'untrustworthy' motives. Borrowing from or loaning to such sources is unwise and could bring harm to your finances. Reputable banks of the 22 century would not fall under that label. A friend you do not know well, trying to fleece you under a claimed econimical shortcut, or stock about to go big, a loan shark, etc. these would be unwise to make pledges with or put up collateral for.
    – Mike
    Oct 1 '12 at 1:34
  • @Mike The bible does not teach that: Proverbs 11:15 "He that is surety for a stranger shall smart for it: and he that hateth suretiship is sure." Plain and simple. What if you cannot pay, they can put a lein on everything you own. How is that love? or even civil? A true friend would forgive the debt. Which is the point I believe the Bible is trying to make.
    – dongle26
    Oct 1 '12 at 3:07
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    @dongle26 - OK, I finally get what you are saying and I think we can agree to disagree. By the way welcome to the SE site and hope you stick around. I looked at some of your answers after you engaged me and the only thing I would say, is that sometimes it might be worth quoting a source that represents your view, this way a person can look it up and understand more details as well as making it more credible and clear. I find it helps also clarifying my own thoughts in the process, so the extra work is worth it. Besides you will get higher rep this way and feel better about the posts. Cheers.
    – Mike
    Oct 1 '12 at 4:50

The Bible says "Owe no man any thing, but to love one another:" Rom 13:8a To be in debt, is not a loving arrangement.

The Old Testament makes a difference between loan making with a friend or a servant and loan making with a stranger. Surety or loan making with a friend Prov 6:1-3 or a servant Ps 119:122 is permitted. But loan making with a stranger Prov 11:15 is unwise.

The solution to Christian debt is to rely upon your friends to forgive those debts when absolutely necessary, not live beyond your means in the first place, and ask the Lord to provide. Ps 37:25


Your question about what is lawful in the Bible first needs this context:

...you are not under the law, but under grace. Romans 6:14

So the literal answer to your question is, all debt is lawful. But is it beneficial? See 1 Corinthians 6:12 & 1 Corinthians 10:23.

Jesus used debt as an analogy for sin (Matthew 18:21-35), which indicates what He thought of it. In Proverbs 22:7 we read that "the borrower is servant to the lender". And Paul warned us not to be slaves to anything Galatians 5:1 (except righteousness).

So while we are permitted to be in debt, we should avoid it where possible. For example, I wouldn't get into debt to buy a car just to get a new car. But if I needed it for a job where I could earn enough to pay the car debt, I would consider it. (There are also other variables to consider like job security.)

Finally, if we are in debt, we should pay it off as soon as possible:

Let no debt remain outstanding, except the continuing debt to love one another...

Romans 13:8

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    You start on the wrong foot here with an over-simplification of law vs grace issues. Is murder now lawful but just not beneficial? Being under grace rather than the law in regards to salvation changes neither the goodness of nor the need for obedience to the law. What part of the law did "debt" fall under? Civil? Ceremonial? Moral?
    – Caleb
    Sep 29 '12 at 9:31
  • @Caleb: the whole law is fulfilled in Christ, all three parts. None remains for Christians! That is the whole point of being under Grace. Sep 29 '12 at 9:37
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    So ... murder rape and pillage? Do the Ten Commandments and moral standards ratified in the OT and affirmed by Christ himself now mean nothing / carry no weight or significance to believers?
    – Caleb
    Sep 29 '12 at 9:45
  • @Caleb: happy to take this to chat, but right now real world calls... Sep 29 '12 at 9:55
  • If I were to extrapolate from your statement that 'none remains', one would quote you: "So the literal answer to your question is, all murder is lawful for Christians, we are under grace." Is that a statement you want your name next to?
    – Caleb
    Sep 29 '12 at 9:55
  • When you assume debt, you make a repayment promise to the lender.
  • If you paint yourself into a financial corner, whether it be with too much debt or too much spending, you put your ability to fulfill that promise at risk.
  • So in a sense, barring exceptional circumstances, if you default on debt or compromise your financial situation to a point where you may not be able to repay that debt, then you are bearing false witness and violating the 9th Commandment.
    • Otherwise, there's nothing inherently sinful about debt.
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    This doesn't answer the question. Was it a sin to assume the debt in the first place?
    – wax eagle
    Sep 29 '12 at 3:19
  • @wax_eagle: If you already had more debt than you can handle, 'Yes'; if not, then 'No'. // In the future, please don't be so quick to downvote. Thank you.
    – Jim G.
    Sep 29 '12 at 12:39
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    don't be so quick to jump to conclusions, the downvote isn't mine
    – wax eagle
    Sep 29 '12 at 13:15
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    I didn't downvote either, but I can see why you gathered them: aside from a passing reference to the 9th Commandment, you have no doctrinal perspective or scripture references to back up your points.
    – Mason Wheeler
    Sep 30 '12 at 16:59

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