Reprinted with permission from No-Debt Living Newsletter, copyright 2000 No-Debt Living. Written by Robert Frank, the editor of No-Debt Living Newsletter, providing financial and time-management news with a Christian perspective.

God advises His children to avoid debt whenever possible.

There are several reasons why:
  • Whenever you borrow, especially from a relative or fellow Christian, it creates a barrier that changes the context and freedom of that relationship. It immediately results in a debt-lender relationship, which can hinder a person from showing the love they might otherwise show. (Proverbs 22:7 The rich ruleth over the poor, and the borrower is servant to the lender.)

  • A loan usually results in the borrower paying interest. That interest increases the cost of an item and doesn't provide anything in return. It is money that could be used for something more productive.

  • Debt, if jumped into recklessly, can fuel greed and covetousness, encouraging people to seek things for the wrong reasons, or receive things that are not God's provision or desire. (Luke 12:15 15 And he said unto them, Take heed, and beware of covetousness: for a man's life consisteth not in the abundance of the things which he possesseth.)

  • If we leap into debt without seeking God's will, we often rob ourselves of an amazing opportunity to see God provide and teach us.

  • Commercial loans often eliminate the role of the church in helping to supply the needs of believers. Many times, if a need were known, it could be supplied through the church body, providing a witness to God's graciousness as He works miraculously through the church and individual believers.

    This approach can obviously be abused. However, in the vast majority of cases, churches and believers fail to make this opportunity even available.

Many other reasons for avoiding debt could be listed, attesting further to God's wisdom.

However, you need to remember, God can choose to provide for your financial needs through a loan as well.

God never said debt was a "sin." In fact, Proverbs 112:5 says A good man showeth favor, and lendeth. Obviously, God would not refer to a man as good if he was causing someone else to stumble.

Deuteronomy 15:7-8 says, If there be among you a poor man of one of thy brethren within any of thy gates in thy land which the LORD thy God giveth thee, thou shalt not harden thine heart, nor shut thine hand from thy poor brother: But thou shalt open thine hand wide unto him, and shalt surely lend him sufficient for his need, in that which he wanteth.

So, before you sign on the dotted line or pull out your plastic, consider the following seven steps and criteria.
  1. Pray about the situation and listen to see what God's will might be.

  2. Make sure your reasons for seeking this action are biblical and worthy.

  3. Look for other alternatives, i.e., selling something to provide the needed cash; waiting until you can save the money; taking it to the church; saying no to the desire; waiting and trusting God to provide a better time.

  4. Make sure both you and your spouse are at peace with the idea of taking on this debt.

  5. Consider whether it makes financial sense. Ron Blue, in his book, Master Your Money, suggests the following rule of thumb: the economic benefit received (including interest, tax benefits, yield and/or growth in value) must be greater than the cost to borrow.

  6. Look at your budget and make sure you can guarantee the payments. (Luke 14:28 For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? )

  7. Consider your overall goals and priorities and make sure this action coincides ... that your time, efforts and money aren't being detoured from something more important.


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