Loans. It's a scary word. Especially to your parents. It means "going in the hole." Big-time debt.
So what's the deal with loans? Should you take one out to help pay for college? What's the Bible say? For answers we went to Tim Stebbings, professor of business at Gordon College in Wenham, Massachusetts. Along with teaching courses in business, he also offers workshops to churches, families and student groups on Christian stewardship and financial management. We believe you and your parents will appreciate Tim's thoughtful comments and insights about loans, debt and money management.
Students and their parents struggle with whether or not to take out loans to pay for college. Why is debt such a big deal?
I'm glad when Christians are cautious about taking out loans. We shouldn't take debt and overall money management lightly. God certainly doesn't. The Bible contains over 2,000 verses about money, money management and possessions.
What specifically does the Bible tell us about loans?
As an overall principle, the Bible commands us to be honest people—people of integrity. If we do not pay back a loan on time, if we don't live up to an agreement we've made with a loan company, we fail to keep a promise we've made. We're not being honest.
Some would say Scripture tells us not to take out loans. Do you think there are any verses that could be interpreted this way?
I believe some people have misinterpreted certain Scriptures, or taken them out of context. One verse, for example, is Psalm 37:21: "The wicked borrow and do not repay, but the righteous give generously." Some are tempted to put a period after "borrow." But the verse is really about the importance of repayment. It tells us that borrowing isn't wicked. What's wicked is not repaying.
Romans 13:8 is another Scripture that's sometimes used to say loans are biblically wrong. This verse says, "Owe no one anything except to love one another…" (NKJV). Some Christians interpret this verse to mean that we shouldn't incur any debt because we must "owe no one anything." I don't believe this is what the apostle Paul wanted to get across.
If you look at this verse in its context, it's really stressing the importance of loving others. Prior to this verse, the passage points out that we are to pay our taxes. I think this section of Scripture uses payment of taxes and repayment of debt to stress that we continually "owe" love to others. Yes, we should pay off our debts, but most importantly we should constantly seek to love our neighbors.
Another verse often quoted is Proverbs 22:7: "The rich rule over the poor, and the borrower is servant to the lender." The point here is that when you owe someone money, your relationship with them is affected. You're obligated to them because you owe them something. And you must understand that this is true—you are obligated to the loan company. You must do what you need to do to live up to that obligation. But I don't think you can use this verse to say that it's wrong to take out a loan.
So Scripture doesn't forbid loans?
No, I don't think so. While you must be cautious and careful, you shouldn't view loans as something that's necessarily wrong. Loans aren't inherently bad or evil. When used properly, they can be a means to achieve some very important and even godly goals. God wants us to develop our gifts and talents to their fullest so that we may serve him wherever he may lead us. And when I talk about serving God, I'm not simply talking about becoming a pastor or a missionary. God can also use Christians in law, business and medicine. The church needs people who will be salt and light in all areas of life. And to develop to your fullest, you might need a certain kind of education, which may mean taking out a loan.