Interest is so woven into modern life that it is easy to forget that the Bible treats it as a serious ethical question. Mortgages, credit cards, car loans, and savings accounts all involve interest, so it is worth looking at what Scripture says and how Christians think about it today.
The passages on lending
The law of Moses contains specific instructions about lending money to fellow Israelites.
“If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury.” (Exodus 22:25, KJV)
Elsewhere, the Psalms describe the person who may dwell in God’s presence as one who “putteth not out his money to usury” (Psalm 15:5, KJV). In older English, “usury” simply meant interest, not necessarily the extreme rates we associate with the word today.
Understanding the context
To make sense of these commands, it helps to picture the world in which they were given. In ancient Israel, most borrowing was not for business growth. It was for survival: a failed harvest, a death in the family, a sudden loss. A person who took out a loan was usually already in trouble. Charging interest on that kind of loan meant profiting from a neighbor’s hardship, and the law forbade it. Lending was meant to be an act of mercy.
The wider biblical picture supports this reading. Proverbs and the prophets repeatedly condemn those who exploit the poor. The concern behind the law is justice and compassion.
What about modern lending?
Christians have thought about this for centuries, and the conclusions vary. Some argue that because modern loans often fund productive activity, such as buying a home or starting a business, charging a fair rate is different from exploiting a poor neighbor. They also point to a parable in which a master rebukes a servant who failed to invest his money.
“Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury.” (Matthew 25:27, KJV)
Others take a stricter view and believe Christians should avoid charging or paying interest wherever possible. A third group draws a line between fair, transparent rates and predatory lending, which clearly runs counter to the spirit of biblical law. The common ground is that exploiting people in need is wrong, and that lending should reflect justice and mercy.
Lending and interest in numbers
Interest changes the real price of what you buy. Imagine a $2,000 credit card balance at an annual interest rate of 18 percent; before compounding, that comes to about $360 in interest per year (0.18 times $2,000). In real life, interest is usually charged monthly and compounds, so the true cost is somewhat higher. If you carried that balance for several years while making only small payments, the interest could add up to a significant share of the original amount.
That is why wise borrowers look at the annual percentage rate before taking on any loan, compare offers, and avoid carrying high-interest balances. The same principle works in reverse: if you are saving, interest works in your favor. If you are borrowing, it works against you.
Lending to a friend or relative
Biblical teaching has very practical applications when it comes to helping people you know. If a friend or family member is in real need, consider helping without interest, and consider whether the help should be a gift in the first place. Treat someone’s hardship as an opportunity for mercy, not profit.
If you do lend, keep the terms simple and clear, preferably in writing, so that misunderstandings do not damage the relationship. And lend only what you could afford to lose.
Watching out for predatory lending
Some forms of lending are designed to trap people. Extremely high-rate payday loans, hidden fees, and deliberately confusing terms are examples. If you are in a tight spot, look for alternatives before signing: a nonprofit credit counselor, a credit union, payment plans with the creditor, or help from your church. The prophets did not mince words about those who profit from others’ desperation.
Examining your own terms
How could you show mercy in your own financial dealings this month, whether in how you lend, how you pay, or how you treat someone in a tough spot?
Lord, teach me to be just and merciful in all my dealings with money. Protect me from those who would take advantage of me, and keep me from taking advantage of anyone else. Help me to lend and borrow wisely, with an eye toward your justice. Amen.
If this topic is on your mind: What Does the Bible Say About Debt? Proverbs 22:7 Explained, Should Christians Co-Sign a Loan? What Proverbs Says About Surety, Living Debt-Free Without Legalism: A Balanced View, and Honest Business and Fair Pay: What the Bible Says About Just Weights.
Scripture quotations are from the King James Version (public domain). This article is for education and inspiration and is not personalized financial advice.