Many Nigerians always have a sense of guilt when they take loans because they feel you have sinned when you borrow money. On the other hand, you have those who do not suffer from such guilt when they borrow money. This set of people do not consider biblical wisdom when they apply for loans. The major reason for this post is to answer the question “As a Christian, can I take a loan”?
As an accountant, I have seen both extremes from my years of experience and we will look at the biblical principles on debt. The Bible does not have a no-borrow stance on debt but it gives clear principles. This post will explore what the Scripture teaches about debt and how to apply that wisdom in Nigeria today.
What Does the Bible Actually Say About Debt?
Psalm 37:21 – “The wicked borrow and do not repay, but the righteous give generously.”
In this verse, what makes the borrower “wicked” is the fact that he or she does not pay, not the actual borrowing. This shows that your intention at the point of borrowing matters a whole lot. If you intend not to pay or you have assessed that your cashflow cannot sustain the repayment of the loan, do not take that loan.
Deuteronomy 28:12 – God promises Israel that they would lend to many nations but borrow from none.
God made a promise to Israel that they would lend to many nations and borrow from none meaning they would be in abundance despite their situation. This promise was not a sign of being under judgement, rather it was a promise of abundance.
Romans 13:8 – “Owe no one anything, except to love each other.”
Paul encourages freedom from debt, but the context is loving others. He doesn’t forbid all borrowing (e.g., mortgages, business loans). In this verse Apostle Paul admonished that we as Christians to owe no one anything except to love one another. This is not an outright ban on borrowing rather a charge to prioritise harmony in the church and amongst ourselves as Christians.
Old Testament Wisdom on Borrowing
Lending to the Poor (Exodus 22:25) – God forbade charging interest to fellow Israelites who were poor.
According to the laws of Moses, the Bible forbids excessive interest of borrowings in order to protect the poor like loan sharks do.
Collateral and Fairness (Deuteronomy 24:10–13) – Respect for the borrower’s dignity.
The Bible here condemns the use of force in settling disputes when it comes to the repayment of loans. It suggests that taking collateral by force is not a fair means of settling debts. It also calls for a gentler approach to poorer borrowers.
The Year of Jubilee (Leviticus 25) – Debts were cancelled every 50 years.
God cares about debt burdens being released. The Bible here says agelong debts should be cancelled every 50 years.
New Testament Principles for Borrowing
The Parable of the Talents (Matthew 25:14–30)
This famous parable told by Jesus is a classic in borrowing and investing, in fact, it shows how borrowing can be a form of investment. You can borrow to invest in things that can transform your life e.g your business and getting an education.
Counting the Cost (Luke 14:28–30)
The analogy in these verses relate to building s tower and emphasizes the need for proper accounting and providing for the estimated cost. The same thing applies to the process for when you are taking a loan. If you are negotiating for a loan, ensure you do your analysis of the repayments, timelines, default clauses to ascertain if your capability in paying back promptly.
Avoiding Guarantees (Proverbs 22:26–27)
These verses warn against guaranteeing a loan for others, especially huge loans. There are exceptions when the amounts to be borrowed are what you as the guarantor can afford to pay off easily or its your spouse or child that is taking a loan as you can monitor them closely.
The Accountant’s Test – 3 Questions Before Any Loan
Before you borrow money you should answer these questions satisfactorily:
1. Why am I borrowing?
If you intend to further your education, expand business expansion, home purchase or for a medical emergency, you can go ahead . However, desist from entering into loan contracts for luxury goods like watches, hair wigs, designer clothes etc. These sorts of purchases are not worth it to go into debt for.
2. Can I realistically repay?
Once you have decided to take a loan and you have been presented with the repayment plan, critically calculate your monthly income and expenses and evaluate if the remainder can repay your monthly repayment. Use the 28/36 rule which say that your housing expenses should not be more than 28% of your income and all your debt inclusive of the one you are considering should not be more than 36%. Have a credible rather than hoping and praying for a miracle even though you have done your calculations and can see that it’ll be difficult to conveniently pay you monthly repayments
3. What is the interest rate and terms?
Proverbs 28:8 warns against usury which is when exorbitant interest rates on loans are charged. To stay safe, avoid loan sharks and unregulated lenders, especially those apps that call people on your contact lists here in Nigeria. You can join or set up esusu or ‘contributions’ with your colleagues because this way, you will avoid high interest rates.
What If You Are Already in Debt? A 4-Step Biblical Action Plan
Step 1 – Confess and Stop Borrowing
If you are guilty of borrowing indiscriminately without discretion in the past, confess this sin and refrain from borrowing. Do not borrow more to pay off old debts.
Step 2 – Create a Repayment Plan
List all your debts, with their amounts, interest and due dates and with this create a realistic repayment plan. Pay off those that have the highest interest first before those with lower interests.
Step 3 – Cut Expenses and Increase Income
Immediately cut back on luxury goods. This is the time to stay focused and get yourself out of the financial mess.
Step 4 – Seek Help from Your Church or Family
Ask for help from your family or church. Sharing your situation with them would lead them to finding practical ways to help you..
When Is Borrowing a Sin?
- Psalm 37:21 states that “the wicked borrow and do not repay, but the righteous give generously.” To avoid this, use the 28/36 rule to ascertain your capability to pay back your loan conveniently
- When you borrow for selfish or sinful purposes (James 4:3). Ask yourself pertinent questions, like will this loan make me achieve my life’s goals? If your answer is yes, then go ahead. If you are uncertain about your case, ask a Pastor for advice.
- When the loan destroys your peace and turns you away from trusting God. When the interest on the loan is too high or when your lender has a reputation where the borrowers are mostly unable to pay and it results in embarrassments for them, avoid such lenders.
- When the terms are unjust (e.g., extremely high interest from unethical lenders). Loan sharks operate under the banner of a corporate entity (CAC), with official registrations in Nigeria but they take extreme measures against those who default. These sort of lenders seize the properties of defaulters and embarrass them publicly. Avoid this sort of lenders and instead use commercial banks who wouldn’t go to extreme lengths to recover their loans.
A Nigerian Perspective on Common Loans
- Student loans – Nigerian Education Loan Fund (NELFUND) was established in 2024 by the current administration for students in higher institutions. They offer interest free loans and the tenures are longer so recipients of the loans are not under pressure to pay off their debt
- Mortgage – Mortgages are safe loans for Christian to take as the goal of everyone, believers alike, is to buy their own homes.
- Car loan – Questionable for luxury cars; for work necessity, may be acceptable. Getting a loan for a car upgrade is safe if the car is not a luxury one. Most cars are due for an upgrade after about four years so getting a newer version of the same car is okay rather than upgrading from a Toyota to a Mercedes Benz.
- Business loan – Before signing the contract for a business loan, it is essential that believers carry out their due diligence with a proper business plan. A business plan would show cashflows, marketing plans, customer acquisition plans for the business. All of these will show the business’ ability to pay off loans. When it is ascertained that the business is viable, then getting a business loan is okay.
- Funeral/wedding loan – Getting a loan for an event like a funeral or wedding is not advisable. Instead, plan a simpler event to cater for a smaller number of people. Many people who have borrowed in the past often have unpleasant experiences when lenders make demands for their money. Think of a newly married couple who borrowed to fund their grand wedding day only to be under pressure to pay off their loans. Their first months as a married couple would be ruined.
Prayer for Wisdom in Financial Decisions
Lord, You own everything. Help me to see borrowing as a tool, not a trap. Give me discernment to know when to borrow and when to wait. If I am already in debt, show me the way out. I trust You as my ultimate provider. Amen.
Conclusion
To cap it all up, the Bible does not forbid loans but we are called to be wise when it comes to matters that concerns loans. Before borrowing ask yourself these simple questions, is this a need or a want? Can I repay it easily? Is this loan glorifying God? The answer to these questions will guide you to come to a biblical position on whether you take a loan. As a Christian accountant, I urge you to only borrow when you have a clear plan and an ability to repay.
