Co-signing: What Does the Bible Say?

What does common sense tell you about co-signing a loan?  For me and for most people, co-signing a loan goes against good judgement.  It’s not only dangerous but it can ruin your finances and friendships as well. At the same time, isn’t it right to help out someone you know due to their poor credit score?  Before we can answer this question, I’d like to go into what the Bible says about this subject and hopefully shed some light into the right path to take. But first, what is co-signing in the first place? Co-signing is rather simple.  What is basically means is that you will take full responsibility for a loan if the person taking out the loan defaults.  So if Joe asks Suzy to cosign for his loan and Joe defaults, Suzy is legally obligated by the bank to repay that loan.  Now do you see how this can get treacherous? What does the Bible say about co-signing? The Bible has some pretty strong language about co-singing a loan.  In fact, the Bible and God are clearly against it.  However, God does not want us to avoid helping our fellow man or Christian brother.  In fact, God does want us to help people in tough situations but at the same time He wants us to use wisdom in these tough situations.  Let’s dive into what God says about so-singing then let’s check out some alternatives that God gives us: A man lacking in judgment strikes hands in pledge and puts up security for his neighbor. (Proverbs 17:18) The Bible is full of wisdom and this verse is no exception.  Someone who takes on another person’s debt is senseless according this scripture.  Avoid co-signing and keep your senses! Do not be among those who give pledges, among those who become guarantors for debts. If you have nothing with which to pay, why should he take your bed from under you? (Proverbs 22:26-27) This is what we call “black and white” scripture.  The Bible is clearly telling the reader not to become a debtor to someone else’s debts.  It doesn’t get much clearer than this. My son, if you have become surety for your neighbor, have given a pledge for a stranger, if you have been snared with the words of your mouth, have been caught with the words of your mouth, then do this, my son, to free yourself, since you have fallen into your neighbor’s hands: Go and humble yourself; press your plea with your neighbor! (Proverbs 6:1-2) God has given you resources and money to manage.  By tying up your resources and risking what the Lord has given you, you are basically giving up freedom by co-signing a loan.  Not only is this unwise, but restrains you to do things for the Lord when He asks it of you.  Wouldn’t you want to be free from this snare in case God called you to do something truly amazing with his money? What are the alternatives? It’s great to be able to help a brother in need isn’t it?  I’ve seen this happen in churches, and it’s such a joy to see God work within people’s financial lives.  Helping out a brother or sister in Christ isn’t wrong, but there is a better way to go about it! You could simply give the person in need an interest free loan and ask that you are repaid after a certain amount of allotted time.  By providing cash, you are reducing your risk of paying someone else’s debt and at the same time offering to help someone out without all the legal paperwork. Hopefully, this have given you some insight into the topic of co-singing.  Let’s recap.  Co-signing is clearly warned against within the text of the Bible.  Alternative?  It’s simple.  Provide the cash for the person in need. Provide an interest free loan or just give the cash and ask God to bless you in other areas of your life.  Lesson here?  Don’t co-sign loans, God does not approve! Related Articles: Which Debt Should I Pay Off First: Car or Student Loan? Are you in a debt cycle? If so, it’s time to get out! Loaning Money To Family: A Good Idea or Not? Bankruptcy and the Bible Is Money Talked About In The Bible? The Bible and Debt Dollars and Doctrine: What does the Bible Actually Say About Money? | Review Jon is a Christian personal finance writer at Free Money Wisdom . His mission is to help you succeed in your personal finance life with the Bible as your compass. When Jon is not writing on personal finance, he spends time with his girlfriend, lifts iron at the gym, and plays Scrabble. You can subscribe to his site through EMAIL / RSS or you can also find him on Twitter and Facebook . As a thank you for subscribing to our newsletter you can download our quick eBook ” 25 Ways To Save Money in 2011 ” for FREE! The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here .

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Co-signing: What Does the Bible Say?

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