Lending and Borrowing

We’re in a sermon series called ‘God’s Word on Today’s Concerns’ and this morning, we’re looking at lending and borrowing.

So what are the assumptions today about lending and borrowing? Well, on borrowing, the big assumption is that living in debt is normal life. ‘Have now, pay later’ is the great motto. While on lending, the big assumption is that we should unfailingly get our money back – and with interest.

Those are the assumptions. What are the consequences? Well, on borrowing the consequence is huge debt. There’s personal debt, with all the anxiety and pressure it brings – especially pressure on relationships. Debt is increasingly one of the stresses contributing to divorce. And there’s national debt – as government spends by borrowing rather than taxing – leaving us and our children with the job of repayment. Then on lending, the consequences have been unreality and selfishness. Unreality, because we’re encouraged to believe that whenever we lend money, it will without fail produce more. And selfishness, because we’re encouraged to think that the point of using money is always a return for me.

So let’s take those assumptions and consequences to the Bible, and see what God says about them. I have two unsurprising headings.


Firstly, BORROWING

Would you turn in the Bible to Deuteronomy 15. Now this is part of the law of Moses – the whole ‘umbrella’ of rules under which Old Testament (OT) believers lived. But the New Testament (NT) says believers don’t now live under that whole umbrella – instead, we’re under the Lordship of Jesus. However, some of the law of Moses is still the Lord’s will for us today: anything based on God’s unchanging character (eg, his command to be faithful) is still his will for us today; and anything based on God’s unchanging creation order (eg, the wrongness of all sex outside heterosexual marriage) is still his will for us today.

Now some bits of the laws on finance are clearly based on God’s unchanging character – eg, his command to care for the poor. But even the bits that no longer directly apply to us still give us principles to live by. Eg, most of us here don’t have fields to leave gleanings for the poor. And even if you’ve got an allotment, leaving a strip of carrots isn’t the best way to help them now. But there’s still a principle in the gleaning law to live by today. So, as we read OT things this morning, we’re looking for God’s unchanging will – plus principles to live by.

So, look down to Deuteronomy 15.7:

7If there is a poor man among your brothers in any of the towns of the land that the LORD your God is giving you, do not be hardhearted or tightfisted toward your poor brother. 8Rather be openhanded and freely lend him whatever he needs. (Deuteronomy 15.7-8)

Now, like all the OT laws about borrowing, that one envisages that the reason for borrowing is: being in real need. Whereas our culture encourages us to borrow not just for what we really need, but for anything we want. So the first question the Bible encourages us to ask about borrowing is: ‘Do we really need to?’ Listen to this challenge from one Christian writer:

Do we believe that God knows best what our needs are? Debt spends money we don’t have. So is our decision to go into debt proof that we believe we need more than God has actually given us? And is debt our means of short-circuiting the God-given means of acquiring things – which include work, saving, planning, self-discipline, patience and waiting?(Money, Possessions and Eternity, Randy Alcorn)

Now he agrees there are situations where borrowing may be necessary. But that challenge is so counter-cultural I think we need to hear it. So principle no.1 is: ‘Do we really need to borrow?’ And if more of us – and our contemporaries – stopped to think about that, more of us would stop borrowing. But that, of course, is not what the lenders want – which is why they offer us so much credit, because that makes it so much easier for us to spend without thinking – so that we buy more and they ultimately make more out of us.

So as a rule of thumb I think we should say to ourselves, ‘Don’t borrow for non-essentials.’ And I think we should also say to ourselves, ‘Borrow as little as you need, and pay it back as soon as you can.’ Just turn forward in the Bible to Romans 13.8:

8Let no debt remain outstanding [literally, owe nothing to anybody], except the continuing debt to love one another...

Now that’s not forbidding borrowing. But it is saying, ‘Pay it back as soon as you can.’ Which is one reason I’m unhappy about borrowing money in order to invest it. Eg, people say, ‘Why not take out a student loan, even if you don’t need it, and invest it to make money?’ Or, ‘Why not borrow more on your mortgage at a low interest rate to make money by investing it at a higher one?’ Well, I think Romans 13.8 says, ‘Why not? Because you should borrow as little as you need, and pay it back as soon as you can.’ (By the way, I’m going to say ‘I think’ quite a lot this morning – by which I’m saying, ‘This is Ian Garrett trying to apply God’s Word to things it doesn’t explicitly address.’ So you need to weigh up whether I’m applying it right.)

So, principle no.1: ‘Do we really need to borrow?’ And principle no.2: ‘Borrow as little as you need, and pay it back as soon as you can.’

Now some of us may feel we’re just beginning to be in trouble with credit and debt – in which case, we need to act now to stop our unnecessary borrowing habits. Eg, as one writer says, ‘Just doing plastic surgery – cutting up your credit card – can be an enormous protection.’ But some of us may be in much bigger trouble, in which case can I say: do come and talk to one of us on the pastoral staff, and we can point you to people in our church with financial expertise who’d be glad to help and advise.

Now what about the issue of buying a house? That’s close to my heart right now, because ours is shrinking by the day as Beth and Ellie, with their entourage of toys, continue to grow. We need a bigger house now. But what if we haven’t got the money to buy one outright?

Well let me start by saying: renting is not a bad thing. It’s often looked down on – because we’re meant to aspire to be home-owners. And it’s often unfairly described as ‘pouring money down the drain’. But that’s not true. After all, if you feed £50 notes down the drain, you get nothing back. If you pay rent, you get a house back – and with none of the hassles of ownership. ‘But,’ comes the reply, ‘You’re not building up an investment.’ To which I think we need to say: let’s be careful about seeing houses as investments – as means to the end of more money. I say that because whether they are depends on the future of the housing market, which only God knows and on which we mustn’t presume. I also say that because we’re to think of houses as primarily means to the ends of family and friendship and hospitality and ministry and rootedness. God isn’t interested in what we could get for our houses, but in what we get our houses for – the lives we live in them.

But having said, it may be right to buy. And at the end of this transcript, you’ll find a box of suggested resources. The second one down is The Bible And Money, by Paul Mills. It’s available on the internet. It has a very helpful section on mortgages. And among other things, he says:

1) Think hard about whether you really need to buy (as opposed to renting).
2) Think about your time-scale: the longer you’re in a house, the more likely it is to be wiser to buy than rent – but we mustn’t presume it’ll be a rising investment.
3) Talk to a financial adviser – and do ask if you don’t know of the ones in our church.
4) Don’t make a financial commitment that will over-stretch you. And build in worse-case scenarios – like whether you can afford the commitment even if your income drops. And I want to encourage us, if possible, not to make commitments that depend on both partners in a marriage working full-time – because I think, if possible, we should avoid mortgaging the freedom of mothers to choose to be full-time mothers at home. And we could free up more time and energy for the spread of the gospel, the building up of the church and the meeting of need if more Christian couples had financial commitments needing only one of them to be working full-time. And then,
5) Pay the mortgage off as soon as you can – if possible, sooner than the provider’s plan (and check that it’ll allow you to do so).

Well just turn back in the Bible to the book of Proverbs, for one last Bible perspective on borrowing. Proverbs 22.7:

7The rich rule over the poor, and the borrower is servant [literally ‘slave’] to the lender. (Proverbs 22.7)

So borrowing is sold to us as the way to the good life, isn’t it – ‘Have now, pay later’? But the truth is: you always pay now as well – because borrowing is a form of slavery, of coming under obligation, of losing freedom. And you feel that, don’t you? That’s why people look so relieved when they can finally say, ‘You know what? We’ve just paid off the mortgage.’ Now that’s not to say borrowing is wrong, when necessary. But it is to say we need to see it for what it is; to avoid or minimise it where we can; and to help others to, as well – eg, parents helping children to avoid or minimise student loans, or to buy houses, and so on.

So that’s borrowing. My other unsurprising heading is:


Second, LENDING

Would you turn back again in the Bible to Deuteronomy 23.19:

19Do not charge your brother interest, whether on money or food or anything else that may earn interest. 20You may charge a foreigner interest, but not a brother Israelite, so that the LORD your God may bless you in everything you put your hand to in the land you are entering to possess. (Deuteronomy 23.19-20)

I said earlier that the OT envisages the reason for borrowing as being in real need. And where this ban on interest appears elsewhere in the law (Exodus 22.25-27, Leviticus 25.35-37), both times the borrower is described as ‘poor’ and ‘needy’. And in that situation, it’s easy to see why interest is banned. Because if you lend to someone in poverty, demanding not only the return of your money, but interest as well, then you’re trying to profit from their poverty. Which is exploitation. And Proverbs 22.16 explicitly condemns, ‘he who oppresses the poor to increase his wealth.’

And yet, in the past 30 years or so, we’ve seen – in fact, been involved in – just such exploitation as UK banks have lent at interest to the poorest countries in the world. Loans were made when interest rates were low; interest rates then shot up, so there was more to repay; commodity prices collapsed, so there was less to repay with. And acting on behalf of us, their depositors, UK banks extracted huge repayments at huge social cost to those countries.

Now charging interest is not always exploitative. But: that illustrates how easily it can be – and how, in fact, it always tends to increase the gap between rich and poor. And that’s why Christian development agencies are working on microfinance projects where individuals like us can lend directly to, eg, farmers or businesses in the Sudan. And in those situations, we also need to recover the Biblical vision of lending without necessarily expecting to get anything back. Keep a finger in Deuteronomy 23 and turn on to Luke 6.34, where the Lord Jesus says:

34‘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. 35But love your enemies, do good to them, and lend to them without expecting to get anything back. Then your reward will be great, and you will be sons of the Most High [ie, behaving like your Father in heaven.].’

But back to Deuteronomy 23. Look at verse 19 again:

19Do not charge your brother interest, whether on money or food or anything else that may earn interest.

Now, some say the ban on interest was only in the context of giving to the poor, where it would be exploitation. But this verse is universal: it’s not talking about a poor and needy brother, but any brother. And in fact the OT is uniformly negative about interest. Eg, listen to these descriptions of the righteous person. Psalm 112:

Good will come to him who is generous and lends freely. (Psalm 112.5 – see the whole Psalm for a description of financial godliness)

Or Psalm 15:

1LORD, who may dwell in your sanctuary? Who may live on your holy hill? 2He whose walk is blameless and who does what is righteous...[and the following list of qualities includes:]5who lends his money without interest... (Psalm 15.1-2, 5)

Now that’s beginning to sound like charging interest might be inherently wrong. But then what do you make of Deuteronomy 23.20:

20You may charge a foreigner interest, but not a brother Israelite...

Would the Lord have permitted that as a concession if it was inherently wrong? After all, you can’t imagine the Lord saying, ‘You may commit adultery with a foreigner, but not with a fellow-Israelite...’ Well, Christians have disagreed about whether the ban on interest is because it’s inherently wrong. Because of Deuteronomy 23.20, I’m not convinced it is inherently wrong. But I am convinced that the Bible is uniformly negative about interest – and that experience shows it has many negative consequences in practice.
Now one more turn in the Bible to Luke 19.11f. This is where Jesus tells his parable of the talents. He pictures our lives as being like a sum of money. And he pictures himself coming back and asking us what we’ve done with them. So look down to Luke 19.20:

20"Then another servant came and said, 'Sir, here is your mina [your money]; I have kept it laid away in a piece of cloth. 21I was afraid of you, because you are a hard man. You take out what you did not put in and reap what you did not sow.' 22"His master replied, 'I will judge you by your own words, you wicked servant! You knew, did you, that I am a hard man, taking out what I did not put in, and reaping what I did not sow? 23Why then didn't you put my money on deposit, so that when I came back, I could have collected it with interest?' (Luke 19.20-23)

Now that shows that Jesus was aware of the kind of financial institutions we’re surrounded by – bankers and lending at interest. And some say it also shows Jesus is positive about interest. They say, ‘The situation here is not lending to those in poverty, but to those in business, through a bank. And Jesus is obviously saying it’s fine to charge interest for that.’ But I don’t think that is so obvious. You see, this servant in the parable believes (wrongly) that the Lord, v21, is a ‘hard man’ – reaping where he has not sown – and that’s what has paralysed him from doing anything. And the Lord says to him, ‘If you really did believe (wrongly) that I was a hard, demanding, unreasonable man, then you’d have done what such a man would do – namely lent the money at interest, expecting to reap where you have not sown, expecting a return for merely lending money. So I think Luke 19 is in line with the rest of the Bible in its negativity about interest.

And as a matter of fact, until the 1400’s, Christian teaching was uniformly negative about interest. The church understood the Bible to ban interest on all loans – whether to those in poverty or those in business. And when it came to business, the church encouraged investors, instead of lending at interest, to become partners – shareholders in today’s terms. Now from the 1400’s, and into the Reformation, the church’s consensus on interest changed. You can read about that in Paul Mills’ article ‘Interest In Interest’ (see the box of suggested resources at the end of this transcript). All I’ll say is that even the reformers like John Calvin who said interest was permissible were negative and cautious about it. They were later quoted as encouraging it strongly, but that’s far from the truth.

So what am I saying? I’m saying: I think it goes beyond the Bible to call interest inherently wrong. But I also think it falls short of the Bible to say, ‘It’s perfectly fine – let’s just get on with it unquestioningly.’

So what is questionable about charging interest? Christian thinkers have given two answers. Answer no.1 is that charging interest is presumptuous: it presumes that whenever I lend money, it will without fail make more, so that I can get the money back – with interest. Well here’s what God says to that attitude in James 4:

13Now listen, you who say, "Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money." 14Why, you do not even know what will happen tomorrow... 15Instead, you ought to say, "If it is the Lord's will, we will live and do this or that." (James 4.13-15)

So no.1, charging interest is presumptuous. And no.2, it fails to take responsibility. You see, if I lend to a business directly as a shareholder, I share the risk that it might fail rather than succeed. I share responsibility. Whereas if I lend to that business at interest through a bank, I share no risk. I’m saying to the other person, ‘It’s 100% your responsibility to make money without fail so as to pay me back with interest’ – which is, arguably, an unreasonable thing to say.

So if you think I’ve got the Bible right on the issue of interest, what should we do? Well, Paul Mills’ article on Investing as a Christian is worth reading (see the box of suggested resources at the end of this transcript). He shows that there are ways of investing that avoid interest and where our financial relationships with others are, from a Biblical perspective, arguably better. Eg, investing in shares – especially the so-called ethical trust funds (which have some questionable aspects, but I think are better). Or, eg, owning a second house and being a landlord. Probably the most questionable thing is just to give our money to banks.

So what’s the bottom line of all this? Well, on borrowing, the Bible asks us, ‘What do you really need?’ And our answer – and our borrowing – will reveal how much our contentment is rooted in circumstances and how much it’s rooted in Jesus. And then on any surplus to our own needs (having saved for future needs – which is perfectly legitimate), the Bible asks us, ‘Why think first of lending it for more gain for yourself? Why not give it for the spread of the gospel, the building up of the church and the meeting of need? And failing that, why not lend it with no expectation that you’ll ever see it again? Because as the Lord Jesus said, then your reward will be great, and you’ll be behaving like your Father in heaven.





Suggested resources

www.stewardship.org.uk has helpful material – including a budgeting tool for planning your finances.

The Bible And Money, Paul Mills, Jubilee Centre Bible Study – helpful and practical (eg, a section on ‘How To Think About Taking Out A Mortgage’).
The Ban On Interest: Dead Letter Or Radical Solution?, Paul Mills, Cambridge Paper (8 pages)
Investing As A Christian: Reaping Where You Have Not Sown? Paul Mills, Cambridge Paper (8 pages)
Interest In Interest, Paul Mills (40 pages – a much fuller look at whether the OT ban on interest should apply today)

All Paul Mills’ work can be ordered, or downloaded free, at www.jubilee-centre.org/resources (under ‘Finance and the economy’)