Co-Signing Loans For Others: What The Bible Says

What does “co-signing a loan for others” mean? The gratis lexicon gives this succinct definition:

“Assuming responsibleness for someone else’s payment obligation inwards the instance that that political party defaults.”

Co-signing: What the Bible Says

Whereas the bible never uses the term “co-signing”, at that identify are several verses on money in improver to it gives plenty of advice almost assuming responsibleness for some other person’s loan.

Most of this advice, appropriately, comes from the Book of Proverbs … a volume of wisdom. I would categorize these passages nether the following headings:

Co-signing a loan is a bad idea

One who lacks sense gives a pledge likewise puts upward security inwards the presence of his neighbour. Proverbs 17:18 (ESV)
Be non 1 of those who give pledges, who lay upwardly security for debts. If y'all have cypher with which to pay, why should your bed be taken from under you? Proverbs 22:26,27 (ESV)
Whoever puts upward security for a stranger testament for certain suffer harm, but he who hates hitting hands inwards pledge is secure. Proverbs xi:xv (ESV)

Enough said? We acquire from these iii passages that the co-signer lacks sense for skillful footing: he puts his family belongings (his bed) at gamble and testament for sure suffer price. However, 1 who hates the sentiment of co-signing is secure.

One who co-signs for others makes himself a wretched opportunity.

Take a human’s garment when he has pose upwardly security for a stranger, inwards add-on to accept away take away maintain it inward pledge when he puts upwardly safety for foreigners. Proverbs xx:xvi (ESV)

Co-signing is bad plenty, but one who is thus reckless equally to co-sign for strangers inward summation to foreigners makes himself a bad opportunity. Lenders will require to a greater extent than collateral (fifty-fifty his article of have on) for whatever credit he is requesting.

One who has co-signed should asking to be out of it.

My son, if yous withdraw hold lay upward security for your vecino, have given your pledge for a stranger, if you lot are snared inward the words of your beak, caught inward the words of your rima oris, so do this, my boy, besides preserve yourself, for you have come upwardly into the mitt of your vecino: purchase the farm, hasten, as well as plead urgently with your vecino. Give your eyes no sleep inward plus to your eyelids no slumber; save yourself similar a gazelle from the mitt of the hunter, like a plane from the paw of the fowler. Proverbs 6:1-five (ESV)

Even after co-signing a loan, the co-signer, realizing how he has jeopardized his have got fiscal good beingness, should instantly inquire to maintain the contract voided.

Why do Christians co-sign?

If co-signing is clearly frowned upon in scripture, why do Christians do so anyway? My guess is that they do so with the best of intentions. After all, the Bible admonishes us to care for the downtrodden, to give generously to the sad and help those who can’t help themselves. Therefore, it seems only right to help a struggling relative or friend get that car loan or mortgage or even a payday loan. “After all”, we recollect, “if I demonstrate my confidence inward this somebody, he volition for sure respond to that confidence past times stepping up too making his payments.”

Why is the bible so negative most co-signing loans?

Solomon, who is credited with writing most of the proverbs, was considered a very wise man. Therefore, we should ask why non co-signing is a wise affair to do. I give notice call upwards of 3 reasons:

It doesn’t truly aid. The fence the somebody needs a co-signer is because the lender doesn’t accept keep confidence he/she dismiss pay. Could it be that we perpetuate the problems of misfortunate credit or money management issues yesteryear co-signing? Wouldn’t wisdom tell us that saying “no” could alive the best assistance we could offering?
Co-signing is implicitly agreeing to debt. Whereas the Bible never says “Debt = Sin”, it does portray debt equally beingness a type of bondage. Wise Solomon, who disdained co-signing, also said, “The rich rules over the poor, as well as the borrower is the slave of the lender.” (Proverbs 22:7) Could it live that he wants us to assist others avoid slavery past times saying, “no” to their co-signing requests?
The relationship is jeopardized. If nosotros assume that the lender who originally turned downward the loan was right in doing thence, inwards that location is a real skillful run a adventure that the co-signed loan testament not acquire downwards paid. At that signal, the i who co-signed testament alive required to fix those payments, which, inwards most cases, testament strain or even respite the human relationship with the borrower.

How do I traveling pocket co-signing requests?

Because scripture gives clear guidelines about co-signing for loans, my wife and I have agreed to a policy of e'er saying “no”. This policy gives us a solid benchmark for such decisions inwards addition to has come upwardly upwards inward handy when, on rare occasion, someone volition postulate us to co-sign a loan. We terminate but respond with, “Our policy is to non co-sign loans … for anyone.”

This beingness said, if we retrieve someone is doing his real best to build ends come across, but is going through a tough time, we will give him coin – no strings attached. We choose away hold done this many times, almost ever without existence asked as good as ofttimes anonymously. Influenza A virus subtype H5N1 gift requires no payments, no debt, no third parties in improver to no danger of jeopardizing the relationship.

Giving, for Jan and me, has been more than a great way to bless others; doing so has sensitized us to those needs while teaching us discernment about when, why and how much to give. As a result, we also are blessed.

Linda together with I kick the bucket on this conversation inward the video below.