Should Christians Borrow Money? A Biblical Guide to Debt and Wise Decisions
A question that often comes up in conversations about debt is, “Is there such a thing as good debt and bad debt?” It’s a helpful question, as long as we define what we mean.
Borrowing money is not automatically sinful. The Bible does not give Christians a universal command never to borrow. The Bible has a lot to say about borrowing, but the primary message is simply that what is borrowed should be paid back. It doesn't prohibit borrowing, nor does it portray that borrowing is bad. However, sometimes, having to borrow results from not following God's commands (Deuteronomy 15:6 and 28:12), which may lead to excessive debt. Still, the need to pay it back remains. At the same time, Scripture speaks honestly about the weight of debt, the importance of repaying what we owe, and the wisdom of counting the cost before making a commitment.
“The rich rules over the poor, and the borrower is the slave of the lender.”
— Proverbs 22:7 (ESV)
Debt creates an obligation. That does not make every loan wrong, but it does mean every decision to borrow deserves prayer, wisdom, and careful thought.
The goal is not to create shame for people who carry debt. Many people borrow because of an emergency, a season of hardship, education, transportation, housing, or responsibilities they did not choose. The goal is to help us make wise, faithful decisions with the resources God has entrusted to us.
What Do We Mean by Good Debt and Bad Debt?
When people say "good debt," they generally mean borrowing for appreciating assets or an investment that generates an income. When they say "bad debt," they mean borrowing for depreciating assets. Appreciating assets like real estate, art, and precious metals usually hold or grow in value over time, while depreciating assets like cars, boats, and furniture lose value over time and may even cost additional money to maintain.
I like the way Robert Kiyosaki describes it. "Assets put money into your pocket; liabilities take money out of your pocket." It's smart and true, but it's by no means permission to go out and borrow to purchase as many assets as you can. For us, as Christians, there's more to it than that.
“Good debt” and “bad debt” are not biblical categories. Debt is not morally good simply because it funds an asset, and it is not morally bad simply because it pays for something that loses value.
Still, these phrases can help us understand the difference between borrowing that may strengthen a person’s long-term financial position and borrowing that may create unnecessary pressure or limit future freedom.
Good debt usually refers to borrowing that:
Is connected to a thoughtful, necessary, or productive purpose.
Fits within a realistic budget.
Has a clear repayment plan.
Leaves room to provide for current responsibilities.
Carries manageable risk.
May help create long-term stability, value, or income.
Examples could include a reasonably priced home, education or training that genuinely improves earning capacity, or a carefully evaluated business or investment opportunity.
Bad debt usually refers to borrowing that:
Funds an impulse, lifestyle upgrade, or purchase we cannot currently afford.
Creates payments that strain the budget.
Prevents us from saving, giving, or meeting other obligations.
Depends on overly optimistic future income.
Leaves no margin for emergencies or changing circumstances.
Keeps us paying for something long after its value or usefulness has faded.
The point is not that every appreciating asset makes debt wise, or every depreciating purchase makes debt foolish. A home can be unaffordable. A vehicle can be necessary. An investment can be risky. A loan can become burdensome even when it began with good intentions.
The better question is not simply, “Will this go up in value?” It is, “Is this a wise commitment for us to make before God in this season?”
Begin With Prayer, Not Pressure
Several years ago, God led us to purchase a rental property. It started when God directed us to create a Giving Account, in which we were putting all our surplus. Over the next two years, as the balance was growing, many giving opportunities came our way, but we never got the go-ahead from God to give. Then, this property was presented to us, and when we prayed, we heard God say, "Buy it!"
Although it wasn't our plan, we obeyed and purchased the property. We took the amount in the Giving Account, which covered the 25% down payment, and borrowed the rest from a bank. Over the past ten years, the property has produced a considerable profit, which we've given away, and now that it's fully paid off, we continue to seek God for how to manage both the property and the profit it produces.
We had confidence in borrowing because we heard from God. But, we also knew we were not violating God's financial principles by taking on this financial obligation. We could easily make the payment out of our personal income, continue to safely provide for all our family's needs, and have enough margin to sell and pay off the loan if necessary.
Before borrowing, bring the decision honestly before God.
Ask for wisdom. Ask Him to reveal your motives. Ask whether fear, comparison, urgency, pride, or the desire for comfort is influencing the decision. Ask whether the opportunity truly fits the responsibilities and resources He has already placed in your care.
“If any of you lacks wisdom, let him ask God, who gives generously to all without reproach.”
— James 1:5 (ESV)
Prayer matters. God can lead His people, bring clarity, close doors, and give peace. But prayer should not become a shortcut around wisdom. Sometimes we may feel peace because we want something badly. Sometimes fear can make a wise decision feel uncomfortable. Sometimes our emotions can cloud what we believe God is saying.
That is why prayer should be joined with biblical principles, honest numbers, wise counsel, and a willingness to wait. God’s leading will never contradict His character or His wisdom.
No article, advisor, or outside voice can give final approval for your decision. But these questions can help you slow down and consider a borrowing decision carefully.
Count the Cost Before You Borrow
Jesus used the example of someone calculating the cost before building a tower.
“Which of you, desiring to build a tower, does not first sit down and count the cost?”
— Luke 14:28 (ESV)
Borrowing should never begin with the monthly payment alone.
Before taking on debt, consider the full cost:
What is the total amount you will repay, including interest?
Can you make the payment if your income changes?
Are you relying on overtime, bonuses, commissions, or future income that is not guaranteed?
What will this payment prevent you from doing?
Does it leave room for savings, giving, insurance, repairs, and emergencies?
If the purchase loses value, could you still repay the loan?
If needed, could you sell the asset without being trapped by the debt?
A loan may fit on paper but still leave a household financially fragile. Wise borrowing considers not only whether you can make the payment today, but whether the commitment remains manageable if life becomes more difficult tomorrow.
Borrowing Should Not Undermine Your Other Responsibilities
Christians are called to provide for their households, honor commitments, and live with integrity.
“Owe no one anything, except to love each other.”
— Romans 13:8 (ESV)
This does not mean every Christian must be completely debt-free before making any financial decision. It does mean we should take our obligations seriously. A decision to take on debt becomes dangerous when it causes us to neglect basic needs, fall behind on bills, stop saving, rely on more debt to cover ordinary expenses, or avoid giving because every dollar is already committed.
If a payment regularly forces you to rob one area of your budget to cover another, that is a warning sign. Debt should not leave you unable to care for your family, meet commitments, or respond to needs.
Margin Matters
Financial margin is the space between what you earn and what you owe. Without margin, even a small emergency can become a crisis. A medical bill, job loss, unexpected repair, or family need can quickly turn manageable debt into overwhelming pressure.
“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”
— Proverbs 21:5 (ESV)
Margin does not mean you need a perfect financial situation before making any decision. Few people ever have one. It means you should be realistic about risk and avoid taking on an obligation that leaves no room for life to happen.
Learn From Both Wise and Unwise Borrowing
When we were in our early twenties, my wife, Natalie, and I borrowed to purchase a new car. We financed 100% of the loan for five years. Shortly after buying the car, we had to reduce our expenses, and the car payment seemed like a good place to start.
The problem was that the car had already lost value. We owed more than it was worth, so we were stuck with both the vehicle and the payment. That decision stalled our financial progress and made it harder to respond to other needs.
Years later, we had a different and redemptive experience when the opportunity arose to purchase our rental property. The difference was not that one purchase involved debt and the other did not. Both did. The difference was in the purpose, the preparation, the risk, the available margin, and the ability to repay the obligation without harming other areas of life.
Practical Indicators of Unwise Borrowing
Borrowing may be unwise when:
You cannot comfortably make the payments from reliable current income.
The payment forces you to underfund necessities, savings, giving, or other commitments.
You have no emergency savings or realistic backup plan.
You are borrowing primarily because of pressure, comparison, impatience, or a desire to maintain a lifestyle.
The purchase depends on a best-case financial outcome.
You would be trapped if the item lost value or needed to be sold.
Trusted, wise people who understand your situation are urging you to slow down.
Practical Indicators of Wise Borrowing
Borrowing may be worth considering when:
You have prayed and sought God’s wisdom without rushing the decision.
The purpose is thoughtful, necessary, or genuinely productive.
The payment fits comfortably within your budget.
You can continue meeting your responsibilities to your household and others.
You have margin for emergencies, repairs, and changing circumstances.
You understand the full cost and repayment terms.
The decision aligns with biblical wisdom rather than merely emotion or opportunity.
You have sought counsel from people who are wise, trustworthy, and willing to be honest with you.
The Goal Is Faithfulness and Freedom
Borrowing is not always wrong, but debt should never be taken lightly.
Don’t fall into the easy trap of only asking the question, “Can I qualify for this loan?” Instead, ask yourself, “Can I carry this obligation faithfully, wisely, and with freedom to follow God’s leading?”
For some people, the wisest decision will be to wait, save, reduce the purchase, or say no. For others, borrowing may be a reasonable and carefully considered tool.
The goal is not to become fearful of every financial decision. It is to become faithful stewards—people who seek God, count the cost, live with margin, honor commitments, and use every resource for His purposes.
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Scripture quotations are from the ESV® Bible (The Holy Bible, English Standard Version®), copyright © 2001 by Crossway, a publishing ministry of Good News Publishers. Used by permission. All rights reserved.
