I am often asked questions regarding the subject of co-signing for a loan. Scripture gives us an abundance of advice regarding financial stewardship, and although it does not specifically say “co-signing”, we can gather enough information relating to the topic to know that it is not a good idea and here is why:
It doesn’t really help. The reason the person needs a co-signer is because the lender doesn’t have confidence they borrower can pay. Could it be that we perpetuate the problems of poor credit or money management issues by co-signing? Wouldn’t wisdom tell us that saying “no” could be the best help we could offer?
Co-signing is implicitly agreeing to debt. Whereas the Bible never says “Debt = Sin”, it does portray debt as being a type of bondage. Wise Solomon, who disdained co-signing, also said, “The rich rules over the poor, and the borrower is the slave of the lender.” (Proverbs 22:7
The relationship is jeopardized. If we assume that the lender who originally turned down the loan was correct in doing so, there is a good chance that the co-signed loan will not get paid. At that point, the one who co-signed will be required to make those payments, which, in most cases, will strain or even break the relationship with the borrower.
Proverbs addresses this subject in the following passages:
Proverbs 17:18 One who lacks sense gives a pledge and puts up security in the presence of his neighbor.
Proverbs 11:15 Whoever puts up security for a stranger will surely suffer harm, but he who hates striking hands in pledge is secure.
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