Should I Go Into Debt?

Last modified on July 2, 2023

In our current culture, debt is seen as a normal way of life and encouraged in many ways. It appears at times that we need to go into debt to achieve a “normal “standard of living.

But is that what the Bible teaches? As we are called to live differently than the world around us in many areas of life, is this one of those areas? Keep reading for a Biblical view of debt and what role (if any) debt should play in our lives.


Why Is Debt An Issue?

At the most fundamental level, debt is borrowing money to pay for something we cannot afford today. Rather than wait and save, we go out and buy something we don’t have the money for.

Our culture glorifies debt, encouraging people to go into debt to buy things they can’t afford in order to live a certain lifestyle. Our spending is out of control, and so is our debt.

Here are some statistics to consider:

1. The average debt of an American in 2020 is approximately $145,000.  

2. According to a January 2020 Bankrate survey, only 41% of Americans could pay an unexpected bill of $1,000 out of savings.

3. Sadly our government is not much better. The US Treasury lists the current debt of the US at $27.5 trillion as of December 1, 2020, which breaks down to approximately $83,207 for every person living in the US.

If the bill for our debt came due today, we would not be able to pay it. That is the problem, but is there a solution? 


What Does the Bible Say?

The pattern that God established in the Old Testament, was different than what we think of today. Someone could go into debt, and even serve as a servant or slave for a period of time to repay it, but the debt was forgiven in the year of Jubilee which happened every 50 years (Leviticus 25:39-40). This ensured that people were not in debt their entire lives.

If an Israelite lent money to a fellow Israelite, they were not to charge them interest (Leviticus 5:35-38). As God’s mercy saved Israel from slavery in Egypt, in the same way the people of Israel were to extend mercy to one another.

However, the nation of Israel did not follow God’s pattern, and the warnings that God laid out in Deuteronomy 28:43-45 came to pass “The sojourner who is among you shall rise higher and higher above you, and you shall come down lower and lower. He shall lend to you, and you shall not lend to him. He shall be the head, and you shall be the tail. All these curses shall come upon you and pursue you and overtake you till you are destroyed, because you did not obey the voice of the Lord your God, to keep his commandments and his statutes that he commanded you.”

The Bible clearly warns that debt is bondage. Proverbs 22:7 states “The rich rules over the poor, and the borrower is the slave of the lender.”

God also reminds us of the significant personal impact of debt as seen in 2 Kings 4:1 “Now the wife of one of the sons of the prophets cried to Elisha, “Your servant my husband is dead, and you know that your servant feared the Lord, but the creditor has come to take my two children to be his slaves.”

In the New Testament, Christians were warned to not go into debt, as we are free from bondage due to the redemptive work of Jesus. 1 Corinthians 7:23 “You were bought with a price; do not become bondservants of men.”

Though the Bible does not encourage financial debt, there is one debt it does encourage, and that is to love one another.

Romans 13:8 “Owe no one anything, except to love each other, for the one who loves another has fulfilled the law.”

The Bible does not forbid debt, but it does not speak positively of it. It acknowledges that debt is a part of life, but has several warnings that we need to pay attention to.

Though debt was a part of the culture in Biblical times, it was very different than today. They didn’t have banks, credit cards, home equity loans etc or the ability to take on the kind of debt that we can today.

The Bible clearly warns us about the dangers of debt, but that leads to a question…


Is It Faith or Presumption?

Some have called it faith to go into debt, because they are trusting that God will provide money to repay the debt.

However, we need to be careful with that assumption. God promises to provide for all our needs (Matthew 6:25-34), so if He has not provided money for whatever you are purchasing, would it not take greater faith to trust Him and wait on His timing (or not purchase the item at all)?

When we take on debt, we are presuming upon God

How? We are putting ourselves into debt bondage (Proverbs 22:7) and presuming upon God to bail us out.

Many times debt reveals a lack of contentment with what He has provided, and ultimately a lack of faith in God’s ability to provide. We aren’t content with what we have, and want more. Rather than waiting on the Lord to provide (faith), we take matters into our own hands and go into debt.


The Impact of Debt

Debt has a profound impact on our lives. Here are a few areas that are directly impacted:

1. Your Testimony

How we handle the finances that God has entrusted to us is a testimony to others. Whether it be your accountant, attorney, financial advisor or your friends and family, it has an impact. If you reach the point where your debts are so great that you are unable to pay them back, that is a poor reflection on the Lord.

2. Your Marriage

Financial stress is one of the leading causes of divorce in the US. Establishing a firm financial foundation for your marriage will allow you to focus on the other areas that may need work in your relationship. If you want a strong marriage, this is essential.

3. Flexibility to Follow the Lord

By going into debt, we limit our ability to respond to God’s direction in our lives. If you are in debt and the Lord calls you into ministry, would you be able to respond to that call? Perhaps He could be leading you to volunteer or give more, but you aren’t able to as you need to work two jobs in order to keep up with your debt payments.

Over the years I have had the privilege of counseling several recent college graduates interested in becoming full-time overseas missionaries. They all had college debt when we met, and were required by their prospective mission organization to pay off their debt to become missionaries. We developed a debt repayment plan and I encouraged them to pay off their debt and move overseas as quickly as possible. In the end, it took them much longer to repay their debt, and then they met their spouse, had children and settled in the US. To the best of my knowledge, none of them have ever served overseas.

Debt limited their ability to respond to God’s call on their lives.

4. Your Future

James 4:13-16 “Come now, you who say, “Today or tomorrow we will go into such and such a town and spend a year there and trade and make a profit”— yet you do not know what tomorrow will bring. What is your life? For you are a mist that appears for a little time and then vanishes. Instead you ought to say, “If the Lord wills, we will live and do this or that.”  As it is, you boast in your arrogance. All such boasting is evil.”

Proverbs 27:1 “Do not boast about tomorrow, for you do not know what a day may bring.”

In 2008 with the financial meltdown and 2020 with the COVID crisis, we saw the negative effect of debt on companies and individuals. Those who were carrying high amounts of debt didn’t plan on having an economic slowdown impact their ability to repay their debts.

Unfortunately, many people think they have their debt under control, because they assume the future will be like the past. But when the unexpected happens, they are unable to deal with their debt and it leads to financial ruin.


Is Living Debt Free Possible?

Yes it is. People do it at all income levels, ages and geographic locations. Here are two examples to consider:

About 10 years ago, there was a young man who wanted to go to college, but would need to pay all his college expenses himself. He did not want to go into debt, so he chose to go to a state university to save money on his education. He also started a small business that required a lot of work, but provided enough income for him to pay off school as he went along. He graduated in four years and did not owe any money for his education.

Another young man bought a house and diligently worked on paying off his mortgage. His future wife was doing the same thing (unbeknownst to him), so when they got married, they were able to finish paying off his mortgage less than 8 years after he bought the home.


Debt Principles

Here are some principles that can help guide your decisions about debt:

1. If you need to go into debt, do so only when absolutely necessary.

2. Borrow only what is needed.

3. If you go into debt, do so for an asset that can increase in value.

4. Repay it as quickly as possible. When God has provided the funds to pay off the debt, pay it off. It reduces the amount of interest owed, but also the bondage that debt brings.

Proverbs 3:27-28 “Do not withhold good from those to whom it is due, when it is in your power to do it. Do not say to your neighbor, “Go, and come again, tomorrow I will give it”—when you have it with you.”

5. Not paying back what you owe is a poor testimony.

Psalm 37:21 “The wicked borrows but does not pay back, but the righteous is generous and gives”

Living debt free requires you to make unpopular choices in our culture, such as living simply or sacrificing the nice things that you may want. But the end result of being able to serve the Lord without the bondage of debt is well worth it.


Parting Thoughts

  1. Debt is easy to get into, yet very difficult to get out of.
  2. Is being in debt a good use of the resources God has entrusted you with? How does it impact your testimony?
  3. If you find yourself in debt and want to become debt free, find someone to hold you accountable to your goal.
  4. Are you content with what God has provided you with and when He has provided it to you, or are you taking matters into your own hands by going into debt to get it now? Do you first turn to the Lord for provision or your credit card?
  5. What is stopping you from living a debt free life?

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