Old Testament – What does it say about loans and interest?
Proverbs 28:8: “He who increases wealth by taking interest or profit from the poor, lays it up for another, who will be good to the poor.”
Unmanageable debt is always inadvisable. Even in ancient times, people avoided getting into debt as much as possible. In the Bible, debt is considered a sin since you serve two masters when you are in debt. And, you need only have one master – God. Therefore, it is best to avoid unmanageable debts and pay off debts as soon as possible.
According to the Bible, the borrower is the slave of the lender. When you are in debt, the sooner you can resolve debt issues, the better. By doing so, you can serve God with all your heart.
However, this is for debtors. There are also some things for lenders and creditors. The Old Testament had completely prohibited interest and loans. He condemns the practice of charging interest to the poor, because giving a loan is an act of compassion and caring for others, for your neighbors. The following quote will clarify this point.
Exodus 22:25: “If you lend money to one of my people who is with you and who is poor, you will not be like a pawnbroker to him, nor will you charge interest. on his part. »
This means that if you, a lender, lend money to someone who is poor and unable to repay, do not sue them to pay the interest. Think you donated the money to a poor person who needed it.
The loan should act as compassion and a way to take care of your neighbors. To take advantage of a poor man’s loan is to exploit him. Likewise, it is not recommended to charge interest and promise anything for a loan.
During the early stages of financial education, a child learns how to save money to donate. Giving to others is a great way to serve God. In doing so, children learn the value of saving and contributing as part of their responsibilities.
Leviticus 25:35-37: “ If your brother becomes poor and cannot keep up with you, you will support him as if he were a stranger and a stranger, and he will live with you.  Not interested [nešek] of him or take advantage, but fear your God, so that your brother may live beside you.  You won’t lend him your money at interest [nešek]nor give him your food for profit.
He insists on showing your kindness to your poor brother(s). If your brother becomes poor and cannot maintain a similar lifestyle, you must support him as a brother. You must lend him the amount he needs to support himself. However, you should not charge her interest but show her your love and lend her money to help her overcome her financial crisis.
Also, it is mentioned in the last verses that if your brother sells himself to you, you must not enslave him. Instead, extend your brotherly love and help him.
Even now, a person in debt can seek help from family and friends and avoid taking out high-interest payday loans. However, they are supposed to refund the amount to avoid any misunderstanding between close relatives.
Deuteronomy 23:19-20: “ You will not charge interest on loans [nāšak II, verb] to your brother, interest [nešek, noun] on money, interest [nešek] about food, interests [nešek] on anything lent with interest [nāšak II, verb].  You can charge a stranger [nokrî] interest [nāšak II, verb]but you can’t charge interest to your brother [nāšak II, verb]that the LORD your God may bless you in all that you do in the land you are entering to take possession of it.
You should not charge your brother interest for food, money or any other loan. You can charge interest to a stranger, but not to your brother. If you do, God will bless you whatever you do – whether you own land or anything else.
This shows that the Bible places so much emphasis on the love of kinship. You should show your love and lend your brother money if you are better off financially.
As you can see, there was a little controversy between Leviticus 25:35 and Exodus 22:25 with Deuteronomy 23:19-20. While Exodus 22:25 and Leviticus 25:35 focus on prohibiting interest on loans for the poor who cannot repay, Deuteronomy 23:19-20 prohibits interest on a loan given to your brother but not a stranger.
To discuss it in today’s environment, lenders have evolved into for-profit organizations in the form of banks and other lending institutions. The lenders entirely follow the foreign ideology. Not only foreigners but lenders also charge high interest rates on everyone. Whether they are brothers (fellow citizens) or foreigners, they have to deal with compound interest.
Although ethically and morally, lenders should not charge interest. However, it might be necessary to change interest rates to benefit the domestic economy. But, due to high interest rates, people are going into debt like never before.
Our government is still somewhat following biblical teachings and helping people with their debt problems, especially during the Covid-19 pandemic. Interest is suspended on most federal student loan payments until May 1, 2022.
“In August 2021, the Department of Education announced a $5.8 billion rebate to erase student loan debt for 323,000 borrowers who have total and permanent disabilities that prevent them from working.”
Eligible borrowers must be registered as having a “total and permanent” disability (TPD) by the Social Security Administration (SSA) for the debt to be automatically discharged. Borrowers no longer have to complete a separate application for relief.
Therefore, it can be said that the government is helping people to solve their debt problems in this difficult time. It can be said that the biblical principles of the Old Testament are followed to some extent today.
Should Christians Lend or Borrow Money?
According to the Bible and the Old Testament, it is better not to lend or borrow money. But the question is, how many Christians are willing to follow that? Money lending has become a big business in the country. Christians are not satisfied with what they have. Hence their dependence on credit cards and loans has increased. Whether it’s credit card debt or a student loan, Americans pay a lot of interest.
On the other hand, lenders are also chasing money. They don’t think with their heart, and that’s where the problem begins. Before giving money, Christians should ask themselves, are they giving money to help people and accumulate good fortune or to reap profits? Does the borrower really need the loan? What about loan terms and interest? Are they reasonable? Can the borrower pay the loan? Is the amount too high? Will it help the borrower to improve his financial situation?
It is the heart that is important. If Christians don’t have a compassionate heart and a strong faith in Jesus, they are more likely to act in ways they shouldn’t.