What does the Bible say about co-signing a loan for others? Is this something a Christian should do?
To co-sign for someone means to obligate yourself to pay for that person’s debt if they default on the loan. This is often done to help someone obtain a loan who doesn’t make a lot of money, or who has a limited / poor credit history.
What The Bible Says About Co-signing
(Proverbs 11:15) There’s danger in putting up security for a stranger’s debt; it’s safer not to guarantee another person’s debt. NLT
(Proverbs 17:18) It’s poor judgment to guarantee another person’s debt or put up security for a friend. NLT
(Proverbs 22:26) Don’t agree to guarantee another person’s debt or put up security for someone else. NLT
These three Scriptures from the Bible are clearly not in favor of co-signing. Agreeing to pay another person’s debt is said to be poor judgement and risky business, whether it is a friend or a stranger.
They Need A Co-signer For A Reason
In a majority of cases when the lender is requiring a person to have a co-signer, there is a legitimate reason that the person is viewed as not being reliable enough to pay back the loan. It could be unwise loans in the past that were not paid back, which leads to having a bad credit history. It may be the person is attempting to purchase something the lender feels they really can’t afford due to their income being to low. In either case, it isn’t wise for a Christian to co-sign.
Co-signing will often lead to hard feelings, particularly when it involves family and friends. Many of these situations end with the person defaulting on the loan and the co-signer stuck with the bill.
For those who fear there will be hard feelings if you don’t say yes to a co-signing situation, you have the Bible to back you up. If you can afford to do so, and want to help someone you really think needs financial assistance, simply giving them money as a gift is the better alternative.
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