Should I loan money to a friend? This is the question that came into the radio show from a caller. Actually the original question was concerning interest rates. However, this soon became the subject of the call.
The Bible does not say not to loan money to another person. It does however say not to charge interest. Here are a couple of references:
35 But love your enemies, and do good, and lend, expecting nothing in return, and your reward will be great, and you will be sons of the Most High, for he is kind to the ungrateful and the evil. 36 Be merciful, even as your Father is merciful.
You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest.
There are additional verses that warn against charging interest. Why wouldn't the Bible focus on just saying not to loan at all versus focusing on charging interest?
The Bible is full of instruction for a better life. Instruction that says if you don't do this you will be better off. You will stay out of harm's way. You will stay above compromise. This is one of those topics. Loaning money in the Bible is not about a business transaction where interest is involved. It is about helping someone out. Charging interest would indicate that your intentions are to get paid back with interest no matter what. Plus, it could also be about making money off of someone else's need.
The chances of getting paid back from a loan to a friend are low. You are more than likely the lender of last resort. If there were other avenues to get money, they would have gone there versus risking borrowing from a friend. Plus, the habits that got them into this situation are probably alive and well. It starts off with the best intentions of paying the money back and habits get in the way. It is a dangerous cycle that imprisons people. The borrower is potentially bringing a friendship into that fold.
Finally, if there is a loan that is easy to be late or skip a payment, it is to a friend. The friend has no recourse like a credit card company or business lender.
Not paying back a loan destroys friendships. The Bible is about supporting and fostering good relationships through Christ and not doing things to tear them down.
If you feel the need to help someone with a loan, lend with the acceptance that it is ok if they don't pay you back. I know - easier said than done. It is the only way you can fulfill the calling to help and not put the friendship in jeopardy. If you can't get to that place, don't loan it at all.