Co-Signing Loans For Others: What The Bible Says

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

“Assuming responsibility for someone else’s payment obligation inward the event that that political party defaults.”

Co-signing: What the Bible Says

Whereas the bible never uses the term “co-signing”, at that spot are several verses on coin together with it gives plenty of advice most assuming responsibility for some other somebody’s loan.

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

Co-signing a loan is a bad sentiment

One who lacks feel gives a pledge together with puts up security inward the presence of his vecino. Proverbs 17:xviii (ESV)
Be non ane of those who give pledges, who set upwards security for debts. If yous hold zippo with which to pay, why should your bed go taken from under yous? Proverbs 22:26,27 (ESV)
Whoever puts upwards security for a stranger testament sure as shooting endure terms, but he who hates hitting hands inward pledge is secure. Proverbs xi:15 (ESV)

Enough said? We learn from these three passages that the co-signer lacks sense for skilful fence: he puts his topographic dot belongings (his bed) at risk together with volition certainly suffer damage. However, ane who hates the stance of co-signing is secure.

One who co-signs for others makes himself a piteous jeopardy.

Take a human’s garment when he has pose upwardly security for a stranger, too hold it inwards pledge when he puts upwards safety for foreigners. Proverbs 20:xvi (ESV)

Co-signing is bad plenty, but 1 who is so reckless as to co-sign for strangers as good as foreigners makes himself a bad endangerment. Lenders testament require more collateral (fifty-fifty his have on) for whatever credit he is requesting.

One who has co-signed should quest to live out of it.

My boy, if you lot have spot upwards security for your vecino, remove keep given your pledge for a stranger, if you lot are snared inwards the words of your rima oris, caught inwards the words of your rima oris, too thence do this, my boy, as well as preserve yourself, for y'all have got come into the manus of your vecino: popular off, hasten, and plead urgently with your neighbor. Give your eyes no slumber in addition to your eyelids no sleep; salve yourself like a gazelle from the mitt of the hunter, similar a bird from the manus of the fowler. Proverbs half dozen:1-5 (ESV)

Even after co-signing a loan, the co-signer, realizing how he has jeopardized his ain fiscal good beingness, should directly inquire to take 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 pitiful 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 l-50 a payday loan. “After all”, nosotros recollect, “if I demonstrate my confidence inward this soul, he testament sure respond to that confidence yesteryear stepping upwardly as good as making his payments.”

Why is the bible thus 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 tin motion recollect of three reasons:

It doesn’t actually assist. The footing the someone needs a co-signer is because the lender doesn’t take keep got confidence he/she tin pay. Could it be that we perpetuate the problems of pitiable credit or coin management issues yesteryear co-signing? Wouldn’t wisdom tell us that saying “no” could alive the best assist nosotros could offering?
Co-signing is implicitly agreeing to debt. Whereas the Bible never says “Debt = Sin”, it does portray debt every bit existence a type of bondage. Wise Solomon, who disdained co-signing, also said, “The rich rules over the piteous, inwards improver to the borrower is the slave of the lender.” (Proverbs 22:vii) Could it be that he wants us to assist others avoid slavery past saying, “no” to their co-signing requests?
The human relationship is jeopardized. If nosotros assume that the lender who originally turned downwards the loan was correct inward doing thus, at that topographic dot is a real sound withdraw chances that the co-signed loan testament non acquire paid. At that signal, the 1 who co-signed testament live required to construct those payments, which, inwards most cases, testament strain or 50-l intermission the human relationship with the borrower.

How do I handgrip 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 in addition to has come inwards handy when, on rare occasion, someone testament ring for us to co-sign a loan. We movement merely respond with, “Our policy is to non co-sign loans … for anyone.”

This existence said, if nosotros recall someone is doing his rattling best to construct ends grab, but is going through a tough 4th dimension, we testament give him coin – no strings attached. We take away hold done this many times, almost ever without existence asked as good as oft anonymously. A gift requires no payments, no debt, no third parties together with no danger of jeopardizing the human 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 likewise are blessed.

Linda together with I top on this conversation inwards the video below.