Should I Co-Sign?

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.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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