Cosigning for a loan is when you agree to be responsible for someone else’s debt if they fail to repay it. It’s a common practice, but one that the Bible warns against. As Christians, we’re called to be wise stewards of the resources God has given us. So what does the Bible say about cosigning, and how should we apply biblical principles to this financial decision?
Introduction
Cosigning is a risky move that can easily lead to financial hardship and strained relationships. While it may seem like a kind and generous thing to do for a friend or family member in need, the Bible cautions against making rash vows or putting yourself in a position where you’ll be held accountable for someone else’s mistakes.
Though the Bible does not explicitly mention cosigning loans, it provides plenty of guidance that applies. We’ll look at what it teaches about debt, stewardship, generosity, and relationships – key factors to weigh when considering cosigning. The bottom line is that while cosigning is not inherently sinful, wisdom and discernment are needed to evaluate if it aligns with godly living in your specific circumstance.
Key Takeaways:
- Cosigning puts you on the hook for someone else’s debt and obligations
- Scripture warns against making foolish financial commitments or vows
- Seek wise counsel and carefully count the risks before cosigning
- If used prayerfully and judiciously, cosigning can be a form of generosity
- But often, it enables financial irresponsibility and strained relationships
- Cosign only after discerning it’s a prudent choice in your situation
Now, let’s dive into a comprehensive overview of biblical principles related to cosigning.
The Bible Warns Against Rash Vows and Pledges
One of the main risks of cosigning is that you’re binding yourself to someone else’s financial obligations. You’re making a legally enforceable pledge to pay their loan if they fail to do so.
The book of Proverbs contains strong warnings against making rash vows or putting up security for someone else’s debt:
“My son, if you have put up security for your neighbor, if you have struck hands in pledge for a stranger, if you have been trapped by what you said, ensnared by the words of your mouth, then do this, my son, to free yourself, since you have fallen into your neighbor’s hands: Go—to the point of exhaustion— and give your neighbor no rest! Allow no sleep to your eyes, no slumber to your eyelids. Free yourself, like a gazelle from the hand of the hunter, like a bird from the snare of the fowler.” (Proverbs 6:1-5, NIV)
This passage cautions that offering yourself as security for another’s debt can trap you. It urges doing whatever it takes to free yourself from the commitment.
Similarly, Ecclesiastes 5:5 warns: “It is better not to vow than to make a vow and not fulfill it.” When you cosign, you’re vowing to pay someone else’s debt. So these verses indicate it’s a pledge not to be made lightly or impulsively.
Cosigning Enables Irresponsibility and Conflict
While it may seem kind and compassionate to cosign for someone in need, the Bible warns this can lead to enabling irresponsible behavior.
Proverbs warns: “Whoever puts up security for a stranger will surely suffer, but whoever refuses to shake hands in pledge is safe.” (Proverbs 11:15, NIV) And again, “One who has no sense shakes hands in pledge and puts up security for a neighbor.” (Proverbs 17:18, ESV)
These verses indicate cosigning for someone who is financially unstable or irresponsible can bring you suffering and hardship. It’s foolish to put yourself on the hook for another person’s poor decisions.
Cosigning can also lead to strained relationships if the other person fails to repay as agreed. It creates resentment on both sides – you feel burdened and trapped, while they feel guilty needing your help.
Scripture encourages personal responsibility and living within your means. Cosigning often undermines these values. As Romans 13:8 says, “Let no debt remain outstanding.” It’s best to avoid creating debts that are difficult to repay.
Guidance on Lending, Borrowing, and Managing Finances
Rather than cosigning, the Bible encourages directly lending to help others in need:
“Give to the one who asks you, and do not turn away from the one who wants to borrow from you.” (Matthew 5:42, NIV)
However, Scripture also teaches the importance of repaying what you borrow:
“The wicked borrow and do not repay, but the righteous give generously.” (Psalm 37:21, NIV)
Borrowing isn’t forbidden, but borrowing with irresponsibility or without intent to repay is warned against. Thus, cosigning for someone exhibiting these tendencies goes against biblical principles of lending.
More broadly, the Bible emphasizes wise financial stewardship and prudent money management. For example:
“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (Proverbs 21:5, ESV)
“Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.” (Proverbs 21:20, ESV)
Cosigning for someone with a history of financial irresponsibility and hasty borrowing often leads to poverty for both of you. It undermines the wisdom and stewardship Scripture calls for.
Count the Cost and Seek Counsel
Considering all of the above, the Bible makes it clear cosigning is a decision requiring much caution and discernment. Jumping in hastily can bring ruin.
Proverbs teaches the importance of counting the risks before making commitments:
“By wisdom a house is built, and through understanding it is established; through knowledge its rooms are filled with rare and beautiful treasures.” (Proverbs 24:3-4, NIV)
“The prudent see danger and take refuge, but the simple keep going and pay the penalty.” (Proverbs 27:12, NIV)
Cosigning is meant to help someone in need, but you must carefully weigh the danger it poses to your own household first. Otherwise, you’ll end up paying the price for someone else’s poor decisions.
In big decisions like cosigning, the Bible also advises seeking wise counsel:
“Plans fail for lack of counsel, but with many advisers they succeed.” (Proverbs 15:22, NIV)
Talk to financial experts, family, and trusted friends before cosigning. Listen to their advice and perspective on the risks and alternatives. They may help you see potential issues you’re blind to in your desire to help.
When Cosigning May Be Appropriate
The Bible’s wisdom certainly advises extreme caution with cosigning. But that doesn’t mean it’s forbidden in every circumstance. Used prudently and prayerfully, it can be a generous act.
For instance, cosigning can meet an urgent need when other options aren’t feasible. The Bible encourages compassion and generosity to those who are suffering. For example:
“If among you, one of your brothers should become poor, in any of your towns within your land that the Lord your God is giving you, you shall not harden your heart or shut your hand against your poor brother, but you shall open your hand to him and lend him sufficient for his need, whatever it may be.” (Deuteronomy 15:7-8, ESV)
In a situation where cosigning is truly the only way to meet an immediate financial need of a close family member or brother in Christ, it may be justified. But great care and confirmation of God’s leading is required.
Additionally, cosigning for a family member working to establish credit can be reasonable if they’ve exhibited financial maturity and you can afford the liability. It comes down to prayerfully evaluating your specific circumstances.
The key is approaching cosigning through the lens of stewardship – managing wisely the resources God has given you. Cosign only if you’re fully convinced it aligns with serving others while also honoring God’s wisdom. Don’t enable irresponsible behavior that could compromise your ability to steward your finances well.
Conclusion
In summary, here are some key principles on cosigning that emerge from Scripture:
- Avoid rash pledges and vows that put you at financial risk
- Be very wary of cosigning for those exhibiting irresponsibility and poor money management
- Generously lend and meet pressing needs directly when possible
- Carefully count the risks and seek wise counsel beforehand
- Make sure cosigning doesn’t undermine your own household stewardship
- Consider it only after much prayer and discernment of God’s wisdom
- If used prudently, can occasionally be justified as a generous act
Cosigning is rarely advised, and caution is clearly warranted. But when treated carefully rather than impulsively, it can be appropriate in certain circumstances. Above all, seek God’s guidance through prayer. Evaluate if cosigning displays faithfulness with the resources He has given you. Use discernment, wisdom, generosity, and stewardship as your guides.
Recommended Bible Verses on Cosigning:
- Proverbs 6:1-5
- Proverbs 11:15
- Proverbs 17:18
- Ecclesiastes 5:5
- Matthew 5:42
- Psalm 37:21
- Romans 13:8
- Proverbs 21:5
- Proverbs 21:20
- Proverbs 24:3-4
- Proverbs 27:12
- Proverbs 15:22
- Deuteronomy 15:7-8
