by Audrey Bauman

Proverbs 6: 1 – 5    (NLT)

My child, if you have put up security for a friend’s debt
    or agreed to guarantee the debt of a stranger—
² if you have trapped yourself by your agreement
    and are caught by what you said—
³ follow my advice and save yourself,
    for you have placed yourself at your friend’s mercy.
Now swallow your pride;
    go and beg to have your name erased.
⁴ Don’t put it off; do it now!
    Don’t rest until you do.
⁵ Save yourself like a gazelle escaping from a hunter,
    like a bird fleeing from a net.

Here is some interesting advice about money.   Basically, don’t lend money to a friend.   Literally, it says you should not guarantee a loan for a friend.  So technically, your friend could borrow the money from someplace/someone else, but you are responsible for repaying the loan if your friend defaults.  That’s kind of like loaning the money yourself. 

If you think about it, those verses are good advice.  If your friend has such poor credit that a bank won’t arrange a loan without your guarantee, then the whole loan situation is on shaky ground.  Solomon says don’t do that, or if you have, get out of it as fast as you can.  Why is that good advice?  Because money owed can rip apart friendships and families. You also don’t want to live with the burden of knowing you are the cause of someone else’s financial distress.

Frankly, I’ve never had a friend ask me to guarantee a loan.  Nor have I had a friend ask me for any large sum of money.  It would be more likely for a family member to ask for a loan, or a guarantee for a loan. You may have had to ask your parents for loans as you started your life after school, or when you were married.  

If you look at loans among family, I still think it would be good to take the essence of Solomon’s advice to heart.  If a loan among family members is large enough that it would cause real difficulty if it could not be repaid, then perhaps it’s not a good idea.  If not being able to repay a loan would cause division among a family, then borrowing in the first place is likely not a good idea.  Don’t make loans in risky situations.

In my own experience, we borrowed money from my parents for a down payment on our first home. It was a private sale with the home owner, and he wanted a much larger than usual down payment.  My parents agreed to the loan because we said we could pay them back within a year, and since we both had good paying jobs, that was definitely not a risky loan.  Now if we had a troubled family relationship and my parents had felt pressured to loan us money, that would have been a whole other story – and not a good one.  

We have loaned money to our kids for special situations, again knowing that they would be able to pay us back, or we were not concerned if they couldn’t repay us. Our three daughters know that there is no preferential treatment for one of them, so any money arrangements have not been a cause of friction between them.  At times, we’ve forgiven loans to one of them, and then paid the other two the same amount of money to keep things fair.  Sometimes they say that isn’t necessary, but it does build trust among family members.  For larger loans, they know the agreement – a signed loan paper by them and us, goes into our estate book, and if the loan is not repaid at our deaths, then they owe the estate that money. Again, our decision on the amount of the loan, rests on whether that money is something we can live without.  

I thought I’d share my experience to give you an example of how borrowing or loaning money can work without disastrous consequences.  I’m sure many of you have other workable ideas on this one, and we’d love you to share them so we can all make wise money decisions – especially when it involves relationships with people we love.

Our song for today is The Perfect Wisdom of Our God by Keith and Kristyn Getty.