Are Pawn Shops and Predatory Lenders Biblical?
Are pawn shops and predatory lending a biblical concept? And, what is the best advice biblically for getting out of debt?
Pawn Shops and Predatory Lenders
As a writer for www.askquestions.org, I was recently asked about whether pawn shops and predatory lenders are Scriptural. The questioner also wanted advice on how a Christian should get out of debt.
The Bible has much to say about our finances. While the Bible doesn't say anything about pawn shops specifically, it would be unfair to say that all pawn shops are unscriptural. There are some Christian owned pawn shops where the owners are very fair and not predatory in nature. However, a Christian pawn shop owner would need to operate their business mindful of verses in Scripture that refer to the concept of "usury". The current definition of the word usury out of the Encarta Dictionary is "the lending of money at an exorbitant rate of interest".
As a Christian involved in lending money, a person would need to explore within themselves what their primary motivation is behind their business operation. A Christian lender should have as their primary motivation a desire to help people when they are in financially dire straits. Certainly, they will make some money as they loan money as part of their business. But, their income should be reasonable and not to the level of making a fortune at the cost of capitalizing on the misfortunes of those who are economically disadvantaged.
The Bible does not forbid the charging of interest except the Israelites were forbidden from charging interest to the poor (Exodus 22:25 NIV). Other places in Scripture do allow for modest amounts of interest to be charged (Matthew 25:27 NIV). Of course, the Apostle Paul gives guidance to the Christian on the issue of owing in Romans 13:8 (NIV) when he says, "Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law."
Psalms 112 (NIV) gives us a good picture of how the believer's financial life should look. For if we love the Lord's Word and follow it, we will avoid debt and instead place our faith in the God that provides. And in verse 5 of chapter 112, we find that the man who lives by the truths in this Psalm will actually be a generous lender.
So how does a Christian who is deep in debt climb their way out in a Scriptural manner that is pleasing to the Lord? First, we must understand how we got into the situation of being a "servant to the lender" (Proverbs 22:7 NIV). At the risk of oversimplification, Christians get into debt because of peer pressure. We see the people around us buying houses, new cars, furniture, etc. As a result, instead of praying to God and making their requests made known unto Him as we are instructed in Phillipians 4:6-7 (NIV) we tend to immediately turn to a company that can help us to have the item now.
Next, we have to consider what we can scripturally do with the debt that we have. If indeed, it is mathematically impossible to pay the debts then it is recommended that you contact each agency you owe and speak frankly with them about the situation. Tell them how much you can afford to pay each month. While filing for bankruptcy is a popular concept today, I believe that regardless of how the bankruptcy is structured the Christian is still obligated for the entire amount. The bankruptcy proceedings can protect you from losing everything. But, many Christians have found great spiritual joy in paying back the entire amount over the course of many years rather than to totally walk away from the debt owed. Non-believers and even Christians may ridicule this thought as many today have an anti-business mentality and will eagerly walk away from the debt as allowed by bankruptcy law. However, since we all pay higher prices as a result of the rampant bankruptcies in our society, a believer in Jesus Christ will usually not want to put an additional burden upon others as a result of their earlier decisions to live in debt.
Lastly, take a hard look at your lifestyle. While we tend to think of cell phones, cable television, magazine subscriptions, internet, etc. as necessities, when a life is closely examined there are often further cutbacks that can be temporarily made while climbing out of a debt scenario. Find one bill to focus on paying off early. Many choose the one with the lowest balance so they can feel a victory when it is paid off. Make minimum payments on the other bills if you can. Then with the one you are focusing on, try to pay more than the minimum each month. Once it is paid off, go to the next one and start to pay it off.
Whether the debt agencies are Christian or not is somewhat unimportant. However, the way you handle your affairs with them can be a tremendous Christian witness to their employees. For a Christian committed to paying all of their debts even when protected by bankruptcy, a note enclosed with a check each month paying the bill can go a long way to sowing seeds of Christianity into the person's life that opens the envelope.
A last recommendation is to become an ardent student of Dave Ramsey. His program can be heard on the radio and television throughout the United States. His website is www.daveramsey.com. He is a strong Christian man with an exceptional understanding of finances. He gives great advice on taking baby steps at first to climb out of debt. The freedom you will find from climbing out of debt and relying more upon your Savior will change your life forever. I pray that the Lord will give you wisdom in this arena of your life.