Loans and the Bible

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QUESTION: Should we make loans to others? What does the Bible teach about charging interest?

ANSWER: One quote (not from the Bible) comes immediately to mind concerning loans, charging interest and other financial dealings (especially with friends). It is that before we lend money to a friend we need to decide which of the two we need the most, because we are sure to end up with one or the other - but not both! This quote certainly rings true. Many good friendships have been destroyed by loans of just a few dollars that were never repaid.

Thousands of years ago, God made provisions for loans and when charging interest was acceptable. He told ancient Israel that at the end of every seventh year they were to cancel ALL debts of those who owed them any money.

In other words, at the end of every seventh year (beginning when the tribes of Israel entered the land promised by God) every Israelite who offered a loan to a fellow Israelite was to consider the debt paid in full. On the other hand, if a loan of money was to someone outside the tribes of Israel, there is no command in the Bible for the creditor to release the debt.

Silver in Scripture
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At the end of every seven years you shall make a release. And this is the manner of the release: Every man who has a loan to his neighbor shall release it. He shall not exact it from his neighbor or from his brother because it is called the Lord's release. You may exact it from a foreigner, but your hand shall release that which is yours with your brother (Deuteronomy 15:1 - 3, HBFV throughout)


Roman silver denarius of Tiberius
Roman silver denarius
of Tiberius (16 to 37 A.D.)

If a fellow Israelite wanted to borrow money during the seventh year, the creditor was not to reject the request by saying, "Hey, it's the year of release. I could lose everything, so come back next year" (verses 9 - 10 paraphrased).

In modern times, it is not entirely certain what year would be the year of release. It is obvious, however, we are to provide loans to our brothers and sisters in the faith. Additionally, not only should Christians offer credit to other believers when they are in the need, they are commanded not to charge a single penny in interest on loans. If money is loaned to someone who is not a Christian, however, a fee may be charged.

If you lend money to one of My people who is poor among you, you shall not be to him as a money-lender, neither shall you lay upon him interest (Exodus 22:25).

You shall not lend for interest to your brother, interest of silver, interest of food, interest of anything that is loaned on interest. You may lend on interest to a stranger, but you shall not lend on interest to your brother . . . (Deuteronomy 23:19)

"But that is all Old Testament," some may say. Well, let us see what it says in the New Testament. Jesus tells us to give to him that asks (e.g. requests a loan), and not to turn him or her away empty-handed.

And if anyone shall sue you before the law and take your garment, give him your coat also. And if anyone shall compel you to go one mile, go with him two. Give to the one who asks of you; and do not turn away from the one who wishes to borrow from you (Matthew 5:40 - 42).

Jesus, in the book of Luke, makes it clear that we are not even to turn our enemies away in their need (Luke 6:30, 35), even if our loans or any interest it may generate is never paid back. Other Bible verses to study concerning lending include Matthew 25:35 - 40, 2Corinthians 9:6 - 7 and James 1:27, 2:15 - 16.

Additional Study Materials
Is it sinful to have money?
Trivia on the Life of Jesus!
 How wealthy were the Magi?
 Does God condemn fundraising?

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