What does the Bible say about
loans and interest?

Submit questions  -  New Articles
QUESTION:  What does the Bible teach about loans and interest? Does it matter if the money that is borrowed is for personal or business use? Is it WRONG to charge family, friends or fellow church members a FEE for lending them capital?

ANSWER:  One quote (not from the Bible) comes immediately to mind concerning loans, charging interest and other financial dealings 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 a few dollars loaned but not repaid.

Thousands of years ago, God made provisions for lending money 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 lent money to another Israelite was to consider the debt paid in full. On the other hand, if the money was loaned to someone outside the tribes of Israel there was no command for the creditor to release the debt.

1. "At the end of every seven years you shall make a release. 2. 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. 3. You may exact it from a foreigner, but your hand shall release that which is yours with your brother (Deuteronomy 15:1 - 3, Holy Bible Faithful Version)

However, there is more. If a fellow Israelite wanted to borrow money DURING the seventh year, the creditor was not to say, "Hey, it's the year of release. I could lose everything, so come back next year" (verses 9 - 10 paraphrased).

What does the Bible say about GOLD?
How rich was King Solomon?
How does the Jubilee Year relate to financial freedom?
What does the Bible say about the poor?

In the 21st century, it is not entirely certain what year would be the year of release. It is obvious, however, we are to lend (as we are able) to our brothers and sisters in the faith.

Now comes the hitch. God commands in the Bible that we are not to charge our brethren a single penny in interest on loans (Exodus 22:25, Deuteronomy 23:19). Again, however, if we are lending to someone who is not a fellow Christian a fee may be charged (see Deuteronomy 23:19 - 20).

"But that is all Old Testament," you say. Well, let us see what it says in the New Testament. Jesus tells us to give to him that asks, and do not turn him away empty-handed.

40. And if anyone shall sue you before the law and take your garment, give him your coat also. 41. And if anyone shall compel you to go one mile, go with him two. 42. Give to the one who asks of you; and do not turn away from the one who wishes to borrow from you (Matthew 5:42, HBFV).

In the book of Luke Jesus 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 your question include Matthew 25:35 - 40; 2Corinthians 9:6 - 7 and James 1:27; 2:15 - 16.

Additional Study Materials
What does Book of Proverbs say about MONEY?
What does Scripture teach about debt?
 What does the Bible say about gambling?
© The Bible Study Site