Old Testament – What Does It Say About Loans and Interest?
Proverbs 28:8: “Whoever increases wealth by taking interest or profit from the poor, gathers it for another who will be kind to the poor.”
Unmanageable debts are always not advisable. From ancient times people avoided debt as much as possible. In the Bible, debt is considered a sin because when you are in debt, you serve two masters. And you need only have one master – God. Therefore, it is better to avoid unmanageable debts and pay off debts as early as possible.
According to the Bible, the borrower is a slave to the lender. When you’re in debt, the sooner you can solve debt problems, the better. This allows you to serve God with all your heart.
However, this is for the debtors. There are also certain things for lenders and creditors. The Old Testament had forbidden interest and credit entirely. It condemns the practice of charging interest to the poor, as making a loan is an act of compassion and concern for others, your neighbors. The following quote should make this clear.
Exodus 22:25 NIV: “If you lend money to a poor one of my people among you, you shall not be like a moneylender to him, nor charge him interest.”
That means if you, as a lender, are lending money to someone who is poor and unable to pay back the money, you are not pursuing them to repay interest. Think you donated the money to a poor person who needed it.
The loan should serve as compassion and as a means to take care of your neighbors. Profiting from a poor man’s credit means exploiting him. Likewise, charging interest and pledging something for a loan is not recommended.
In the early stages of financial education, a child is taught to save money to donate. Donating to others is a great way to serve God. In this way children learn the value of saving and giving as part of their responsibility.
Leviticus 25:35-37: “ If your brother becomes poor and cannot support himself from you, you shall support him as a stranger and stranger and live with you.  don’t care [nešek] from him or gain, but fear your God that your brother may live with you.  You shouldn’t lend him your money at interest [nešek]nor give him your food for profit.”
It emphasizes showing your kindness towards your poor brothers. If your brother becomes poor and cannot lead a similar lifestyle, you should support him as a brother. You should lend him the required amount that he needs to support himself. However, you should not charge him any interest but show your love and lend him the money to help him overcome his financial crisis.
Furthermore, it is mentioned in the later verses that if your brother sells himself to you, you should not enslave him. Instead, expand your brotherly love and help him.
Even in this day and age, a person in debt can enlist help from family and friends and avoid taking out high-interest payday loans. However, they should pay back the amount to avoid misunderstandings between close relatives.
Deuteronomy 23:19-20: “ You may not charge interest on loans [nāšak II, verb] to your brother, interest [nešek, noun] on money, interest [nešek] on food, interest [nešek] on anything lent at interest [nāšak II, verb].  You can charge a foreigner [nokrî] interest [nāšak II, verb]but you must not charge your brother interest [nāšak II, verb]that the LORD your God may bless you in whatever you do in the land which you are coming to possess.”
You should not charge your brother interest on food, money, or other loans. You can demand interest from a foreigner, but not from your brother. If you do this, God will bless you whatever you do – whether you own land or anything else.
It shows that the Bible places so much importance on kinship love. You should show your love to your brother and lend him money when you are financially better off.
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 the loans made to the poor who cannot repay, Deuteronomy 23:19-20 prohibits interest on a loan made to your brother was given, but not a stranger.
To discuss this in today’s context, lenders have become profitable organizations in the form of banks and other lending institutions. The lenders follow the foreign ideology entirely. Not only foreigners, but also lenders charge high interest rates from everyone. Whether brothers (fellow citizens) or foreigners, they have to deal with compound interest.
For ethical and moral reasons, lenders should not charge interest. However, it may be necessary to change interest rates to benefit the economy. But because of high interest rates, people are getting into debt like never before.
Our government still follows a little bit of biblical teachings and helps people solve their debt problems, especially during the Covid-19 pandemic. Interest on most federal student loan payments will be suspended until May 1, 2022.
“In August 2021, the Department of Education announced a $5.8 billion round of forgiveness to service student loan debt for 323,000 borrowers who have a complete and permanent disability that prevents them from working.”
Eligible borrowers must be registered as “completely and permanently” disabled (TPD) with the Social Security Administration (SSA) in order for the debt to be automatically forgiven. Borrowers no longer need to submit a separate application to receive relief.”
Therefore, it can be said that the government is helping people to solve their debt problems during this difficult time. It can be said that the principles of the Bible found in the Old Testament are in some ways followed today.
Should Christians borrow or borrow money?
According to the Bible and the Old Testament, it is best not to lend or borrow money. But the question is how many Christians are willing to follow that? Money lending has become big business in the country. Christians are not content with what they have. Therefore, their reliance on credit cards and loans has increased. Whether it’s credit card debt or student loan debt, Americans pay a tremendous amount in interest.
On the other hand, lenders are also chasing the money. They don’t think wholeheartedly, and that’s where the problem begins. Before Christians give money, should they consider whether they give money to help people and accumulate happiness, or to make a profit? Does the borrower really need the loan? What about loan terms and interest rates? Are they sane? Can the borrower afford the loan? Is the amount too high? Will it help the borrower improve their financial situation?
It’s the heart that matters. If Christians don’t have a compassionate heart and strong faith in Jesus, they are more likely to act in ways they shouldn’t.