Should Christians Charge Interest to Fellow Christians?

Overdrafting in America“Before you lend money to a friend decide which you need most, because you are sure to end up with one or the other.”

This quote may sound overly dramatic (I have lent money to people and remained friends), but we can all recognize the truth in it. Lending is a dicey prospect and gets even stickier when we talk about lending to fellow Christians.

The Bible is far from silent on the matter. Lending in itself is not condemned and is even encouraged. It’s a mark of God’s blessing to be in the position to make a loan (Deut. 28:12). The righteous is one who gives and lends (Ps. 37:21,26). God approves of the generous person who lends freely (Ps. 112:5).

In certain cases, lenders graciously forgave debt (Matt. 18:32-33). In Israel, every fifty years was the year of Jubilee, in which all debts were forgiven (Deut. 15:1-3Neh. 10:31). Deuteronomy 15 goes into more depth: at the end of every seventh year (beginning when the tribes of Israel entered the land promised by God) every Israelite who lent money to another Israelite was to consider the debt paid in full. On the other hand, if the money was loaned to someone outside the tribes of Israel there was no command for the creditor to release the debt (verse 3).

But there’s more. If a fellow Israelite wanted to borrow money DURING the seventh year, the creditor was not to say, “Hey, it’s the year of release. I could lose everything, so come back next year” (verses 9-10 paraphrased).

Charging Interest

If we lived in almost any time and place but here and now, the answer to whether we should ever charge interest to our brothers would be a cut and dry “no”. The Christian church has a long history of condemning the charging of usury (FYI – contrary to popular belief, usury doesn’t mean excessive interest, it refers to ANY interest).

But, in an age of subprime mortgages, credit cards, and payday lending, it’s hard to imagine that charging any interest was once considered immoral. Yet like many ancient moral leaders, Moses commanded, “If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest.” (Exodus 22:25).

There is an important distinction here; we should never charge interest to the needy, so I don’t believe God is saying that charging interest in other circumstances is wrong per se. But we should be wary of contributing to indebtedness and we should NEVER profit from lending to another Christian.

So, how do we decide whether charging interest is okay when lending to other Christian individuals? Here are some questions that will help you decide:

* Is the person’s need legit? Is it a want or a real need? If it is, giving is called for. (Luke 6:30). If not, the asker may be going through a much needed lesson and your gift/loan is not what God would want.

* Will your gift/loan contribute to irresponsible behavior? If so, lending may be the best route.

In my personal lending, I choose to lend without interest to my brothers and sisters with the joyful spirit that the loan may be a gift and will serve to help the borrower. If I don’t have this spirit (or the money to lend), I don’t do it, plain and simple.

What about you? Do you think Christians should lend money? Should they charge interest?

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3 thoughts on “Should Christians Charge Interest to Fellow Christians?

  1. Dear Kevin,

    I am so happy to read this post!!!!! Thank you so much. I have faced much ridicule from other believers for how I give to the poor who cannot take a loan, because they can barely make it from paycheck to paycheck. People quote to me other charitable organizations who give loans to the poor and charge interest, so they can keep giving money.
    I have given money here in Russia for 17 years and have never run out!

    So from now on I am going quote you and send your email. ☺ However there is one thing I don’t agree with you on. I personally think it is wrong to charge another believer interest, no matter if they have the ability to pay back the money with interest or not! I base this belief on

  2. Sorry!! I thought I was pasting the reference I base my conviction on, on the email and it flew away! Here is the reference Deuteronomy 23:19-20.. Lois

    From: Lois McNeill
    Sent: Thursday, May 16, 2013 8:10 PM
    To: ‘ACCOUNT417’
    Cc: Kevin Cross (kevin.cross@fbconline.org)
    Subject: RE: [New post] Should Christians Charge Interest to Fellow Christians?

    Dear Kevin,

    I am so happy to read this post!!!!! Thank you so much. I have faced much ridicule from other believers for how I give to the poor who cannot take a loan, because they can barely make it from paycheck to paycheck. People quote to me other charitable organizations who give loans to the poor and charge interest, so they can keep giving money.
    I have given money here in Russia for 17 years and have never run out!

    So from now on I am going quote you and send your email. ☺ However there is one thing I don’t agree with you on. I personally think it is wrong to charge another believer interest, no matter if they have the ability to pay back the money with interest or not! I base this belief on

    • Hey Lois! Thanks for the reply. You are to be commended for your great selfless attitude and desire to follow God’s word when it comes to money and helping others.

      I set out to write a post saying that it was always wrong to charge interest to a fellow Christian and my heart still feels that way (after all, that’s what I do personally), but I found arguments from several people I trust (Randy Alcorn, Bible Money Matters) making the argument that there are special circumstances when charging a small amount of interest is okay (to adjust for inflation, to teach a child a financial lesson, etc).

      In my personal walk, I’m with you and will choose to err on the side of caution and never charge a fellow Christian interest. Thanks for reading!

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