The bible says cosigning for another person’s loan is a foolish move. Yet, people do it every day instead of taking the appropriate action, which usually is exhorting them to work and save money until they can afford to buy the item without debt.
Many people want you to cosign because they have a burning desire for something material. They may even call it a need. Many will ask you even though they have been irresponsible in managing their money, living within their means, and paying debts. Financial institutions will not loan them money on their own record because of their poor credit history. At that point, getting a loan requires a cosigner who has adequate annual income, a reputable loan re-payment history, and a willingness to put his / her financial reputation and situation on the line for the person who wants to take out the loan.
The cosigner will become surety for the bank that gives it a much better chance of getting repaid the loan principle and associated interest, even if the borrower does not follow through on his / her obligation. The best advice is to never cosign. Many people never repay loans that have cosigners. This is the reason the bible says, “when you cosign your garments are likely to be taken.” If you believe the person has a true need and has acted disciplined and responsible with their finances and life, give as much toward the need as you can afford without going into debt or failing to care for your responsibilities.
The bible does not make a distinction between cosigning for people who have been responsible with their finances and those who have not or have never acquired a loan and thus have no re-payment history for financial institutions to bank on. It simply admonishes us to never become surety for another person.
An important lesson we must teach to our extended family, friends, and acquaintances is their need to be godly stewards of the incomes and assets God entrusts to them, to have integrity in repaying debts owed, to pursue needed and desired material things in a debt-free fashion, and to allow God to supernaturally provide them with desires they cannot afford.
Please pray for this ministry and email any questions. May the LORD bless you richly as you follow His plan!
Proverbs 17:18, Romans 13:8, 2Corinthians 8:12, Ephesians 5:17
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