Some Christian teachers have taught that borrowing is not scriptural. However, this is wrong; the Bible neither teaches that it is wrong or right; it neither prohibits nor encourages it. Borrowing is not sinful; it only tells that there should be some restrictions in borrowing.
Scriptural Principles for Borrowing
1. Avoid Borrowing unless absolutely Necessary
You should only borrow for genuine reasons and only when it is absolutely necessary. Sometimes what you need is just some belt-tightening measures to tide you over till income starts flowing again. This applies both in your personal life and in your business.
2. Avoid Signing Surety on a Loan
To be surety for someone means to be a guarantor or stand in for someone when he defaults in paying a debt.
There are two things to learn about debt: the bank doesn’t offset anyone’s debt. No matter how much you have on deposit, the amount would not be used to offset you debt unless you have first pledged it as collateral. Second, it could become very challenging when you default in payment; the interests and commissions begin to accrue; the longer you default, the heavier the burden becomes. Paying the interest alone could become very harrowing not to talk of paying off the main debt.
3. Avoid Long-Term Debt
In Jewish culture, at the end of seven years, your debt would be cancelled irrespective of what amount the debtor owes. The idea behind this is that no one should be in debt for a long period of time. This kind of culture is worthy of emulation; avoid long-term debts and loans that you have to pay for a lifetime. You should not leave loans for your successors or posterity to inherit.
The “Don’t” Principles of Debts
- Don’t borrow needlessly
- Don’t sign surety
- Don’t take on long-term debt
Note that these are called principles, not commandments. In general, principles are instructions for making intelligent decisions; they are not absolutes. So to do any of the above is not a sin; it’s just dumb.
The bottom line of borrowing is that you should always repay whatever you owe. This makes you credit worthy and helps to sustain your business relationships. It also helps to maintain your integrity and keeps people’s impression about you positive.
The dangers of borrowing
The misuse of credit can be hazardous to your personal and corporate finances. But in reality, there are potential dangers associated with any use of credit, not just its misuse.
3 POTENTIAL PERILS OF CREDIT
Borrowing makes the debtor obligated to the lender; it puts the lender in control of the borrower. This could be sometimes dicey; the debtor could begin to make compromises that he would otherwise not make because he is under the control of the lender.
1. Borrowing provides a false sense of security
Borrowing could provide a false sense of security; sometimes it portrays a false sense of prosperity; you think you are doing well when actually you are not. Some businesses have gone under because they kept borrowing without limitation and had to continue using their assets to offset the debts.
Borrowing delays critical appraisals
Borrowing prevents you from making a critical appraisal and finding solution to the problem. This is because when temporary comfort or relief is provided other critical matters or the root cause of the problem that brought about borrowing in the first place are not addressed. For example, when a family borrows to buy a new car, they have only avoided looking critically at their budget.
In most cases, borrowing is a symptom rather than a problem. And in many instance, credit becomes a substitute for trusting God in facing hard decisions.
2. Borrowing Can Create Unnecessary Pressures
Living with debt is a lot more stressful than living without it. Not being able to do all the things you would like to do may be somewhat irritating, but the threat of having your home and business sold out from under you is really stressful.
Debt may not lead to physical death, but it surely can lead to financial death, and living under a death threat can wear any person down.
The only people who don’t believe debt is stressful are those who never have been debt-free. People who live under pressure long enough no longer remember what true freedom is.
An adaptation from Mrs. Ibukun Awosika’s materials. She is CEO, Chair Centre Limited