People applied for and received both commercial and personal loans during Bible times.[1] When the biblical authors speak of borrowing and lending, however, they are generally referring to the personal loans sought by those facing difficult times. In this light, the Lord challenged those capable of lending to do so not in the interest of generating income but in the interest of helping those who were less fortunate.
The need to borrow became important when the poor, who were already living on the edge of financial exhaustion, faced famine that depleted their food supply or a government that demanded taxes at an exorbitant rate (Neh. 5:3–4). While at times it became necessary to borrow a tool (2 Kings 6:5) or an animal (Exod. 22:14–15) to accomplish a specific task, the most perilous kind of borrowing required the less fortunate to borrow a consumable product like grain (Neh. 5:3). In the Bible, borrowing can involve something as simple and familiar as tools (2 Kings 6:5).
Like a contemporary loan, the terms of an ancient loan included a rate of interest, a lending period, and some form of collateral. In records from ancient history we find that the interest rate for a loan varied from 12 percent to as much as 33 percent.[2] While the Israelite lender could charge a non-Israelite a reasonable rate of interest on a loan, a loan made by one Israelite to another who was impoverished was to be interest free (Exod. 22:25; Lev. 25:35–37; Deut. 23:20). God also limited the time of such a loan to just six years. At the seventh year, all debts were forgiven.
While this might seem to discourage the practice of providing loans to those in need, God promised that those honouring this directive would enjoy material blessings that more than compensated the lender for the apparent loss (Deut. 15:1–6). Furthermore, God’s law permitted the taking of property or persons as collateral, though with limitations. It was the debtor, not the creditor, who picked the property to guarantee the loan, and lest the creditor attempt to influence the choice of collateral, he was required to remain outside the residence while the debtor selected the item (Deut. 24:10– 11).
The use of a poor person’s outer garment as collateral also receives special mention. Because this garment doubled as the blanket that helped keep the wearer warm on cold winter nights, the cloak could be kept for only one night before it was returned to the debtor (Deut. 24:12–13).[3] Sadly, this principle was not always honoured (Amos 2:8). In dire circumstances, either the debtor or a member of the family could be offered as collateral for the loan (2 Kings 4:1; Neh. 5:5). Although such persons were called “slaves” and their labour was used to pay off the loan, the Lord called for them to be treated as “hired workers” who were to be released from service in the Year of Jubilee (Lev. 25:39–40).
In addition to this legislation designed to eliminate the abuses of the borrowing-lending process, the book of Proverbs offers very practical advice when it comes to guaranteeing the loan made by another: “One who has no sense shakes hands in pledge and puts up security for a neighbour” (Prov. 17:18). Those who had already done so were strongly urged to free themselves from that circumstance as quickly as possible (Prov. 6:1–5).
The expected connotations follow the realities of the borrowing described above. Lenders were perceived as powerful while borrowers were perceived as lacking power. “The rich rule over the poor, and the borrower is slave to the lender” (Prov. 22:7). Thus the ideal life was one in which the person always played the role of lender. The Lord used this image to describe the blessings that covenant obedience would bring to his people, including obedience to his laws regarding proper lending habits. “For the LORD your God will bless you as he has promised, and you will lend to many nations but will borrow from none” (Deut. 15:6).
The biblical authors roundly criticised those who abuse the system. It is the wicked who borrow money but then fail to repay it (Ps. 37:21), who lend and charge interest rates in violation of God’s direct instructions (Neh. 5:6–11), or who fail to show leniency to their debtors. Uncharitable lenders who themselves have been forgiven a larger debt are likened to those who refuse to forgive others in the same way the Lord has forgiven them (Matt. 18:23–24). Jesus closed the parable of the unmerciful servant with these words: “This is how my heavenly Father will treat each of you unless you forgive your brother or sister from your heart” (Matt. 18:35).
By contrast, the righteous are characterised as those who lend to the poor as if they were lending to the Lord (Prov. 19:17). They lend freely and without giving undo attention to the repayment schedule (Deut. 15:8–9; Pss. 37:26; 112:5). Jesus took these notions another radical step when he challenged his followers to examine their way of living: “And if you lend to those from whom you expect repayment, what credit is that to you? Even sinners lend to sinners, expecting to be repaid in full. But love your enemies, do good to them, and lend to them without expecting to get anything back” (Luke 6:34–35).
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[1]For a discussion of loans and securities in the ancient world, see Roland de Vaux, Ancient Israel: Its Life and Institutions, Biblical Resource Series (Grand Rapids: Eerdmans, 1997), 170–71.
[2]. Some regard this as a ceremonial act that became part of the lending process indicating the goodwill that existed between creditor and lender. VanGemeren, New International Dictionary of Old Testament Theology and Exegesis, 3:176.
[3]. This very protocol is noted in the El Amarna texts from Egypt (fourteenth century BC) where Canaanite vassals bow seven times before the pharaoh. Walton, Zondervan Illustrated Bible Backgrounds Commentary, 1:116.