I get this question a lot.
People are always curious about the morality of charging interest on loans. Is it a sin? Is it allowed in the Bible?
I could give you a simple answer, but that wouldn’t do justice to the complex question. So, in this post, I want to explore both the biblical and historical perspectives on lending money with interest.
What Does the Bible Say About Lending Money With Interest?
When it comes to lending money with interest, a few scriptures in the Bible offer some guidance.
In the book of Deuteronomy, it’s stated,
“But if there are any poor Israelites in your towns when you arrive in the land the Lord your God is giving you, do not be hard-hearted or tightfisted toward them. 8 Instead, be generous and lend them whatever they need. 9 Do not be mean-spirited and refuse someone a loan because the year for canceling debts is close at hand. If you refuse to make the loan and the needy person cries out to the Lord, you will be considered guilty of sin. 10 Give generously to the poor, not grudgingly, for the Lord your God will bless you in everything you do. 11 There will always be some in the land who are poor. That is why I am commanding you to share freely with the poor and with other Israelites in need.Deuteronomy 15:7-11
The key words here seem to be “in your towns” and “need.” In other words, it’s not wrong to charge interest on a loan if the person you’re lending to is not part of your community or is in tough financial straits.
In the book of Exodus, it says
“If you lend money to any of my people who are in need, do not charge interest as a money lender would.Exodus 22:25
This verse seems to be more clear-cut in that it forbids charging interest for any type of loan extended to a fellow believer.
So, where does that leave us? It seems that the Bible isn’t entirely clear on the issue of lending money with interest. While one verse seems to condone it, another verse seems to forbid it. Ultimately, it’s up to each individual to decide what feels right for them.
Views From Different Christian Denominations on Lending Money With Interest
When it comes to money and interest, there are a range of Christian denominations with different viewpoints.
The Catholic Church has a nuanced history with usury or lending money with interest. The Vatican has long held that charging interest on loans is sinful, but in recent years the church has softened its stance, allowing for the charging of interest in some circumstances.
On the other hand, many Protestant denominations don’t see interest as a sin in and of itself. For example, the Presbyterian Church believes that charging interest can be justified under certain circumstances, such as when it’s used to help others achieve financial stability.
Each denomination has its own set of guidelines and principles for lending money with interest. Understanding these viewpoints is important if you’re considering charging interest on a loan.
Pros and Cons of Lending Money With Interest
When it comes to lending money with interest, there are pros and cons on both sides of the argument.
On the one hand, charging interest for loans is a way to make money. This is especially true for people who are willing to take on the risk of lending money to others. By charging interest, lenders can ensure that they profit from their investment, even if the loan is not paid back in full.
On the other hand, some people believe that lending money with interest is a sin. They argue that it’s unfair to charge someone extra money simply because they need to borrow it. Furthermore, they claim that charging interest creates a cycle of poverty, as those who can’t afford to pay back their loans are forced to take out more loans, which only exacerbates their financial situation.
Exploring Ethics and Morality When It Comes to Charging Interest
It’s not just the Bible that has something to say about charging interest on loans. Most major religions have some guidance on the matter.
In Islam, for example, charging interest is seen as exploiting the poor and vulnerable and is, therefore not allowed. There are different schools of thought in Judaism, but the general consensus is that charging interest is only permissible in certain circumstances, such as when lending to non-Jews.
As for Christianity, there are a few different interpretations of what the Bible says on the matter. Some Christians believe lending money with interest is a sin, while others believe it’s only a sin if the borrower is struggling financially.
I don’t think there’s a clear-cut answer. I think it depends on the individual borrower’s circumstances and whether they can repay the loan with interest.
What Are Some Alternatives to Lending Money With Interest?
There are a few different alternatives to lending money with interest. One option is to give the money as a gift. If you need the money back, this is not an option, but it’s worth considering if you can part with it.
Another option is to agree on a repayment plan that doesn’t include interest. This could be structured in various ways, but the basic idea is that you would agree on a repayment schedule that doesn’t accrue interest.
Finally, you could invest the money in something that will earn a return without charging interest. This could be a business venture, a rental property, or anything else that has the potential to earn income. There’s a bit more risk involved with this option, but it’s something to consider if you’re looking for alternatives to lending money with interest.
Practical Tips for Financial Decisions in Line With Biblical Principles
Here are some practical tips to help you make financial decisions in line with biblical principles:
- When it comes to borrowing and lending money, always err on the side of caution. If there’s any doubt in your mind about whether or not something is a sin, it’s best to avoid it.
- Be very careful about who you lend money to. The Bible says that we should be “wise as serpents and harmless as doves” (Matthew 10:16). This means we must be careful about who we lend money to, lest we get taken advantage of.
- Be generous with your giving. The Bible tells us to “give generously and be unselfish” (Proverbs 11:25). When it comes to giving, don’t hold back. Give generously, and God will bless you in return.
Lending money with interest is allowed in the Bible. There are rules in the Bible about lending money, but there are no specific verses that forbid lending with interest.