Should I Ask My Brother for a Loan?
SIMON’S youngest child is sick and in urgent need of medicine. But Simon is very poor and cannot afford it. What can he do? Well, a fellow Christian named Michael is better off than he is financially. Perhaps Michael will lend him the money. In his heart, however, Simon knows it is unlikely that he will be able to repay the loan.*
When Simon approaches him, Michael is faced with a dilemma. He realizes that there is a genuine need but suspects that Simon will not be able to pay back the money because he has a struggle just to feed his family. What should Michael do?
In many countries, people can lose their means of livelihood overnight and find themselves with no money or insurance to cover medical bills. Bank loans may be unavailable or far too expensive. When an emergency arises, the only solution might seem to be a loan. Before asking for a loan, though, there are some important matters to consider.
Count the Cost
The Scriptures provide guidelines for both the lender and the borrower. By heeding this counsel, we can avoid many misunderstandings and hurt feelings.
For instance, the Bible reminds us that we should not view lightly the matter of borrowing money. The apostle Paul urged Christians in Rome: “Do not you people be owing anybody a single thing, except to love one another; for he that loves his fellowman has fulfilled the law.” (Romans 13:8) Ideally, the only debt a Christian should owe others is love. Hence, we might first ask ourselves, ‘Is this loan really essential?’
If the answer is yes, then it is wise to consider the consequences of getting into debt. Jesus Christ showed that important decisions require careful thought and planning. He asked his disciples: “Who of you that wants to build a tower does not first sit down and calculate the expense, to see if he has enough to complete it?” (Luke 14:28) This principle applies when considering whether to ask a brother for a loan. Calculating the expense of a loan means calculating how and when we will repay it.
The lender has a right to know how and when the loan will be repaid. By weighing matters carefully, we will be able to give him concrete answers. Have we calculated the cost of paying back the loan within a reasonable period of time? Of course, it would be easier to tell our brother: “I will repay you as soon as possible. You know you can trust me.” But should we not handle such matters in a more responsible way? We must be determined from the outset to repay the loan, since that is what Jehovah requires of us. “The wicked one is borrowing and does not pay back,” says Psalm 37:21.
By calculating how and when we will repay the loan, we remind ourselves of the serious commitment we are making. This reduces the likelihood that we will incur debt needlessly. If we can avoid going into debt, there are advantages. Proverbs 22:7 warns: “The borrower is servant to the man doing the lending.” Even when both lender and borrower are spiritual brothers, a loan may affect their relationship, at least to a certain extent. Misunderstandings over loans have even disrupted the peace of some congregations.
Explain Why the Money Is Needed
The lender has a right to know basically how we are going to use the borrowed money. Apart from this loan, are we also borrowing money from others? If so, we should make this clear, for it has a bearing on our ability to repay the loan.
It is especially important to distinguish between a business loan and one needed to meet some emergency. A brother has no Scriptural obligation to lend money for a commercial venture, but he is likely to feel inclined to help if another brother, through no fault of his own, finds himself unable to pay for such basic necessities as food, clothing, or essential medical care. Frankness and truthfulness in these matters will help to prevent misunderstandings.—Ephesians 4:25.
Put It in Writing
A written record of the agreement is a vital step if we would avoid future misunderstandings. It is easy to forget specific details of an agreement unless they are put in writing. We need to write down the amount borrowed and when it is to be paid back. It would be advisable for both the borrower and the lender to sign the agreement and for each of them to keep a personal copy. The Bible indicates that financial transactions should be documented. Shortly before the Babylonians destroyed Jerusalem, Jehovah told Jeremiah to buy a plot of land from one of his relatives. We can benefit from a review of the procedure.
“I proceeded to buy from Hanamel the son of my paternal uncle the field that was in Anathoth,” said Jeremiah. “And I began to weigh out to him the money, seven shekels and ten silver pieces. Then I wrote in a deed and affixed the seal and took witnesses as I went weighing the money in the scales. After that I took the deed of purchase, the one sealed according to the commandment and the regulations, and the one left open; and I then gave the deed of purchase to Baruch the son of Neriah the son of Mahseiah before the eyes of Hanamel the son of my paternal uncle and before the eyes of the witnesses, those writing in the deed of purchase, before the eyes of all the Jews who were sitting in the Courtyard of the Guard.” (Jeremiah 32:9-12) Although the foregoing example concerns a purchase rather than a loan, it shows the importance of handling monetary transactions in a clear, unambiguous way.—See The Watchtower, May 1, 1973, pages 287-8.
If difficulties arise, Christians should try to resolve them in harmony with Jesus’ counsel recorded at Matthew 18:15-17. But one elder who has tried to be helpful in such matters comments: “In nearly every case, there was an absence of a written agreement. As a result, there was no clear understanding between the two parties as to how the loan had to be repaid. I am convinced that putting these matters in writing is a sign of love, not of mistrust.”
Once we have made an agreement, we should certainly strive to keep our word. Jesus exhorted: “Just let your word Yes mean Yes, your No, No; for what is in excess of these is from the wicked one.” (Matthew 5:37) If some unforeseen problem prevents us from repaying the loan on schedule, we should immediately explain the situation to the lender. Perhaps he will allow us to repay the loan in smaller amounts over a longer period of time.
Yet, unfavorable circumstances do not excuse us from our responsibilities. A person who fears Jehovah does his best to keep his word. (Psalm 15:4) Although matters may not turn out as we expected, we should be prepared to make sacrifices in order to pay our debts, since that is our Christian responsibility.
Be Cautious About Lending Money
Of course, the borrower is not the only one who needs to weigh matters carefully. A brother who is asked for a loan also has to calculate the expense. Before lending money, we are wise if we take the time to consider matters carefully and objectively. The Bible urges caution, saying: “Do not get to be among those striking hands, among those who go security for loans.”—Proverbs 22:26.
Before committing yourself, consider what might happen if the brother is unable to pay you back. Would you then have serious financial problems yourself? Even though the brother may have the best of intentions, circumstances can change or his calculations may be mistaken. James 4:14 reminds all of us: “You do not know what your life will be tomorrow. For you are a mist appearing for a little while and then disappearing.”—Compare Ecclesiastes 9:11.
Especially in the case of a business loan, it would be wise to consider the reputation of the borrower. Is he known for being trustworthy and reliable, or is he inept at handling financial matters? Does he have a tendency to go around the congregation asking various ones for money? It is wise to bear in mind these words: “Anyone inexperienced puts faith in every word, but the shrewd one considers his steps.”—Proverbs 14:15.
At times, a loan may not be in the best interests of the borrower either. It could easily become a burden for him, robbing him of his joy. Do we want such a brother to become our “servant”? Might a loan affect our relationship, fostering uneasiness or even embarrassment if he is unable to repay it?
If there is a genuine need, could we consider making a gift rather than a loan, even though the amount may be smaller? The Scriptures encourage us to be compassionate when we see our brother in need. “The righteous one is showing favor and is making gifts,” sang the psalmist. (Psalm 37:21) Love should move us to do what we can to give practical help to needy brothers.—James 2:15, 16.
Consider Your Steps Carefully
Since loans are a potential source of friction, we might view them as a last resort rather than an easy option. As noted earlier, the borrower should be frank with the lender, putting into writing how and when the loan will be repaid. And in a case of true hardship, a gift may be the best solution.
Michael did not lend Simon the money he requested. Instead, Michael gave him a smaller amount as a gift. Simon was grateful for such help toward paying for his child’s medicine. And Michael was happy that he was able to show his brotherly love in a practical way. (Proverbs 14:21; Acts 20:35) Both Michael and Simon look forward to the time under Kingdom rule when Christ “will deliver the poor one crying for help” and nobody will say, “I am sick.” (Psalm 72:12; Isaiah 33:24) Until then, let us consider our steps carefully if we ever feel obliged to ask a brother for a loan.
Substitute names are used here.
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Putting loan agreements in writing is a sign of love, not of mistrust