Should A Christian Lend Money And Earn Interest?

A few months ago I wrote a post that discussed the topic of whether or not Christians should use debt, and whether or not it was a sin to use debt.  The conclusion I came to in that post was that the Bible frowns upon debt and warns of the dangers of debt, but that it doesn’t necessarily say you should never use debt.

In the comments on that post another related topic came up.  The question was whether or not Christians should ever lend money, and if they do, whether or not they should charge interest.

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This is a topic that I’ve looked into a bit over the past couple of years because as you know I’ve been investing in Lending Club for the past few years.  With Lending Club you’re essentially lending money to other people, with an interest rate associated with your loans.

So today I thought I’d talk about Christians and lending, and whether I believe it’s OK for a Christian to lend.

Doesn’t The Bible Say That The Borrower Is Slave To The Lender?

Should A Christian Lend Money And Earn Interest?I think a lot of people’s first reaction to the question “should Christians lend money”, is that Christians should not in fact lend money.  After all, there are a lot of verses in the Bible warning us of the dangers of debt.

The rich rule over the poor, and the borrower is slave to the lender. Proverbs 22:7

No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money. Matthew 6:24

Do not be one who shakes hands in pledge or puts up security for debts;if you lack the means to pay, your very bed will be snatched from under you. Proverbs 22:26-27

It is better not to make a vow than to make one and not fulfill it.  Ecclesiastes 5:5

These verses are only the beginning, we’re warned about the dangers of debt time and again.  The thing is, the Bible doesn’t say that debt is a sin, or that you should never lend.  In fact there are verses that talk about lending money and receiving interest in a positive light.

Lending Money Can Be A Blessing

In the Bible there are multiple references to people lending money or giving money, and it is shown that it can be a great blessing in many cases.

 Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.  Matthew 25:27

Rather be openhanded and freely lend him whatever he needs. Deuteronomy 15:8

They are always generous and lend freely; their children will be blessed. Psalm 37:26

It is well with the man who is gracious and lends; he will maintain his cause in judgment. Psalm 112:5

And if you lend to those from whom you expect repayment, what credit is that to you? Even ‘sinners’ lend to ‘sinners,’ expecting to be repaid in full.  Luke 6:34

While the Bible does speak of lending money in a positive light, it also gives warning to not lend at interest to those who are poor or who are unable to repay.  It speaks of lending freely, but it warns us against being greedy, and exhorts us to act with justice.

I think that we also need to take into account how times have changed, and how borrowers have much more protection under the law today. In ancient times being in debt and not repaying could lead to becoming a slave, or completely having your freedom taken away from you.  It wasn’t a pretty picture.  In modern times borrowers have many more protections under the law, which mean that they won’t end up being a literal slave, not be able to eat, or be taken advantage of without any legal recourse.

Lending With The Wrong Heart

I think the problem for Christians with lending and earning interest comes in when we are lending money with the wrong heart, and we’re not lending to help people or improve their situation, but we’re being greedy and taking advantage.  In other words, we’re not acting out of compassion or to be a blessing, but simply thinking about the money.

Multiple verses talk about not taking advantage of the poor or less fortunate when lending.

“‘If any of your fellow Israelites become poor and are unable to support themselves among you, help them as you would a foreigner and stranger, so they can continue to live among you. Do not take interest or any profit from them, but fear your God, so that they may continue to live among you. You must not lend them money at interest or sell them food at a profit. Leviticus 25:35–37

For what does it profit a man to gain the whole world, and forfeit his soul? Mark 8:36

If you lend money to My people, to the poor among you, you are not to act as a creditor to him; you shall not charge him interest. Exodus 22:25

I think that we all need to be careful about the lures of money, and examine our hearts to ensure that we’re not lending money for the wrong reasons, and that we’re not setting our hearts on the interest that we might be earning.

Making Sure Lending Comes From The Right Place

When lending money I think it’s important to consider whether you’re being a blessing, or if you’re doing something that isn’t helpful in the end.  Some questions you can ask your self to make sure you’re acting from a good place:

  • Is the loan reasonable?  Is the interest rate out of line, or is it better or equal to what someone might get elsewhere?
  • What are the terms of the loan? Are the terms reasonable, and do they give rights to both borrower and lender?
  • Is the need worth the loan?  Is the loan being sought for an item or need that is worth borrowing for?
  • Is the amount being borrowed excessive?
  • Is the borrower able or likely to repay? Will this improve their situation?

Of course I think it’s also important to be in relationship with Jesus Christ on a daily basis by being in His word, and praying about the decisions you’re making. If you’re not properly grounded in your faith you’re much more likely to act in ways that you shouldn’t.

With all that said, I do believe it is possible for a  Christian to lend money, earn interest and still be a blessing to others through their loan.

So what are your thoughts? Do you think that Christians should lend money? Should they charge interest?

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Last Edited: 12th March 2013

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Comments

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  1. Sun says

    I’ve been using LendingClub as well and have a high percentage earning (over 10%). I also lose a lot of interest due to loans going bad. I don’t look at why people state they need the money, but just lend to the highest interest rate option. It seems to me that if we want to give purpose to our lending and with the right heart, we have to evaluate each loan we invest in. Seems like microlending sites like MicroPlace and Kiva are better aligned with Christian values as the interest rate is low and they go to individuals in mostly other countries that are in need.

    I sometimes think the interest I earn from LC could be repurposed for Christian goals, but I also think what damage that may bring to the borrower.

  2. says

    I believe if you have the money to lend, then just give it to them from the kindness of your heart instead of a loan. Even if lending money is with good intention, in most instances, lending money changes the relationship.

  3. says

    We sold a house as a contract for deed a couple of years back. As part of the agreement, they paid a lump sum up front, made payments for 3 years (with interest), and then made a balloon payment at the end. They were the ones that asked if we would be willing to do a sale this way (as their current cash was tied up in rental properties they had), they came up with the terms and presented us with the offer. At that point, I was ok with moving forward with it knowing that they were ok with it since they presented it to us. The interest rate they proposed to us gave us a little additional income that made it worth taking the risk vs. doing a traditional sale (and they knew that, which is why they offered it to sweeten the deal). In the end, the buyers paid off the loan almost a year early and all went well.

    I agree with Robert if it is smaller sums of money, you should loan out of the kindness of your heart and not charge interest. However, I was ok with the interest in this case since it was on a larger scale (and we didn’t have the money to just loan it to them outright).

  4. leona says

    I am a government employee a christian and believer that God will work mightily and do great things in our lives and our church. One of our concern is to reach out the children for Christ and one of the strategy is to build a school from pre-school, grade school then we need to have a secondary so that the children will be molded in the christian environment. To start we pledge but then we need more fund, we leaders tried to borrow from local investors. I am a member of a cooperative, while our loan application is in process and in order to continue the construction, I borrowed from the cooperative with the condition that when the loan will be released we will pay for it. Months have passed and our loan was denied, now I suffer for the interest and penalties. I am confident that my God will help me out of this debt but as to how i do not know.Sometimes I thought that what we do is wrong and ask God for forgiveness. Can i get financial help from fellow christians who love God? maybe there are.

  5. leona says

    While i read all that is posted in this site, I learned lot of lessons if only i read this before i will not be in this mess.

  6. says

    Isaiah 55: You who are hungry and have no money, come, buy and eat!
    Jct: They’re not giving it away, Isaiah is lending you the money to buy and eat but expects for you to try to pay it back or he’d have given it to you.
    Thomas 95: Jesus said: If you have money, do not lend it out at interest.
    Jct: One would think the issues are resolved. But Thomas was deleted from the Bible by priests who knew better than Jesus, so you decide whether Jesus was right that inflicting a usurious mort-gage death-gamble on your neighbor forcing him to pay 11 when he only got 10 is not okay or whether the priests of the new edition were right.

  7. says

    I find it amazing that there can be misunderstandings about this. It just shows how profoundly our thinking has been corrupted by the money lenders.

    The Bible is clear: do not lend at interest.

    Lend freely, expecting nothing in return said Jesus in Luke 6:35.

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