Financial Principles that are Biblical

Not With Your Money

Sometimes in today’s culture it is hard to stay out of debt let alone take on someone else’s debt. When we are in debt, we are in a position of servitude to the lender. Scripture’s perspective of debt is clear. “Let no debt remain outstanding” Romans 13:8 NIV.

Don’t Co-sign

Cosigning directly relates to taking on debt in that you become responsible for the debt of another. “A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.” Proverbs 17:18.

What’s the background behind cosigning? In essence what a professional lender is saying is that after analyzing the loan, he sees no way that he will offer a loan unless he can get someone who is financially responsible to guarantee the loan.

Alarming statistics surround those who cosign a loan. Crown Ministries reports that a Federal Trade Commission study found that 50% of those who cosigned for bank loans ended up making the payment. Seventy-five percent of those who cosigned for finance company loans ended up making the payments! The statistics prove that the casualty rate is high.

If you cosign, the creditor can collect the debt from you without first trying to collect it from the borrower. If you aren’t in a position to pay it, you can be sued and/or your credit rating could be damaged.

We need to understand the real implications of cosigning and the debt that we are assuming through this action. As Christians, we should help our friends and family to appreciate the position they are putting us in by asking us to cosign.

If a lender won’t take the risk, should you?