Biblical Guidance About Personal Loans, Cosigning, & Gifts

Want to avoid a lot of financial agonies in life, when it comes to family and friends?

While the Bible is loaded with financial advice, here's a short summary of what God says about interpersonal non-business loans and co-signing personal loans... as a wise Christian once told me:

1. NEVER loan money to anyone as a personal favor, and NEVER co-sign a personal loan! Business is business and personal is personal. There is ALWAYS some kind of payday and consequence involved when money and wealth are at stake in this life. When you’re waiting for friends or family to pay you back for their overdue personal loan, it’s all too easy for bitterness, frustration, and anger to percolate in the lender who did the borrower the ‘favor’. As the Bible says, “The borrower is servant to the lender.” Being in THAT obligatory lender/borrower servitude mode tends to ruin relationships, because it is seldom treated as a strictly business arrangement with clearly defined consequences and target dates for termination of the loan. Financial martyrdom and abuse have no place in familial or friendly relations.
2. NEVER GIVE away more than you can afford to lose permanently. Do NOT allow feelings, instead of principles, to drive your giving habits. Gifts, donations, and financial favors, based on feelings, get out of hand quickly, and usually fail most or all financial accountability tests, for both lender and recipient.
3. IF someone asks for help and YOU have proven that there is a real need, remember that genuine urgent borrowers seldom calculate what they may really need, or feel embarrassed to ask for as much as they think they might need, so GIVE them a GIFT of more than they say that they need, BUT, do NOT give more than you can afford to let go forever.
4. NEVER expect to see any such GIFT returned to you.
5. Let it go!
6. Never ask for gifted money to be returned.
7. NEVER remind other people of what you did for them.
8. NEVER tell anyone else of your generosity.
9. Tell that recipient person that, as Jesus Christ has been good to you, and to them, it is your responsibility, and theirs, to responsibly share His blessings with others, whenever they are aware of the real needs of others, AND able to afford to help. (Remember Christ's commendation of the “Good Samaritan”.)
10. Take personal responsibility for doing your OWN investigation of the other person’s need
11. Do NOT let the gift come between you and the other person.
12. As you give that person that GIFT, and whether or not the person insists on wanting to pay you back, politely refuse to allow them to return your gift. Instead, tell them to do the same for someone else, as God has allowed you to do for them, when the time comes in their own life.

Using this model of responsible giving to others (which is entirely different from tithing to God), you will keep your real friends and be free of those who would bleed you financially. Stick to these rules in personal finances, and you will live and sleep with a clear conscience, at least with respect to those who love truth and harmony in personal relationships.