There are a variety of questions that come up about whether or not lending money and earning interest is unBiblical. A reader just sent me this question, so I figured it was worth creating an article to share all my thoughts on this topic.
Is it okay for Christians to earn interest? Is it a sin?
“Hi Bob, super grateful for all of your content and bringing a biblical perspective on finances. Running into a bit of a mental block regarding investing and hoping to get some perspective.
I recall sitting in finance classes in undergrad and grad school (read: within the last 5-6 years) and questioning how the Lord would have me look at capital markets, investments, etc.
The following verses have stuck out during quiet times over the years and have stumped me:
- verses such as Proverbs 28:8 and Psalm 15:5
My word search on the original language and description of interest in these verses has led me to study the concept of “usury” (along with a host of sermons from folks like Martin Luther) and seem to be in conflict/tension with other concepts in Scripture such as “leaving an inheritance to children’s children,” “to him who has more will be given (multiplication of talents).”
There’s also the obviously very practical piece about money declining in value over time due to inflation, etc. I’m a huge fan of you and Dave Ramsey and understand the value of compounding interest intellectually, but there seems to be this fear that comes every time I dream big about finances and then run into these verses that make me wonder if I’m being greedy or if earning interest is “okay” to do.
While I understand I’m a complete stranger and you have no context about my spiritual maturity, background, etc. I’m wondering if there are any nuggets of advice you typically/broadly share that help Christians with similar types of questions become “unstuck” when it comes to investing 🙂
Thanks so much!”
My thoughts on whether or not it is Biblical to lend and earn interest
“Is money lending with interest a sin?“
As always, with stuff like this, I do not have all the answers, but I will happily share what I’ve learned and my current understanding in hopes that it might help someone else study this out.
And this is a question that I personally had to study for myself and decide where I stand on it. So here goes:
Proverbs 28:8 specifically mentions earning interest from the poor
If we look at Proverbs 28:8 NIV:
“Whoever increases wealth by taking interest or profit from the poor amasses it for another, who will be kind to the poor.”
So, as we see all through scripture, God has a soft spot for the disenfranchised, and I believe it is clear that He doesn’t want to see them taken advantage of.
This might look like a payday loan shop (with abusively high interest rates) strategically placed in the lower-income part of town.
What the Bible says about charging interest to the poor
“Where in the Bible does it say lend money without interest?”
Now that we started there, let’s dive into a bunch of other verses I found that address this issue of charging or earning interest.
The Bible has several verses that address the topic of charging interest, particularly in the context of loans.
These verses can be found across both the Old and New Testaments.
Exodus 22:25 – “If you lend money to any of my people with you who is poor, you shall not be like a moneylender to him, and you shall not exact interest from him.”
Again, we see the specific mention of “the poor.”
And these next verses echo that as well…
Leviticus 25:35-37 – “If your brother becomes poor and cannot maintain himself with you, you shall support him as though he were a stranger and a sojourner, and he shall live with you. Take no interest from him or profit, but fear your God that your brother may live beside you. You shall not lend him your money at interest nor give him your food for profit.”
Psalm 15:5 – “Who lends money to the poor without interest; who does not accept a bribe against the innocent. Whoever does these things will never be shaken.”
And Ezekiel 18:8, 13, 17 all echo this instruction to not lend money at interest to the poor.
What about charging interest to fellow Christians?
Now, interestingly, in Deuteronomy, we see some instructions that God gave to Israel about who NOT to charge interest to.
Deuteronomy 23:19-20 – “You shall not charge interest on loans to your brother, interest on money, interest on food, interest on anything that is lent for interest. To a foreigner, you may charge interest, but to your brother, you shall not charge interest, that the Lord your God may bless you in all that you undertake in the land that you are entering to take possession of it.”
Additionally, we see something similar in Nehemiah 5:7 and 10 as Nehemiah rebukes the nobles and rulers for charging interest to their own people.
As I read this, it sounds like God is saying “don’t charge interest to each fellow Israelites, but it is okay to charge interest to everyone else”.
So the question becomes, how do you interpret these Old Testament instructions to Israel and their application to us today?
Personally, I have chosen to avoid situations where I would be lending money to a fellow believer and charging interest.
As a follower of Jesus under a New Covenant, I don’t view this as a “law” that I must abide by, but rather as a principle that God laid out that I suspect might still benefit me today.
What did Jesus say about earning interest?
Now, flipping over to the New Testament, we don’t see as much written on this topic, but if you recall, in the Parable of the Talents (that Jesus shared), the land-owner was rebuking the lazy steward for NOT putting the money that he had been entrusted with in the bank to earn interest:
Matthew 25:24-28
24 “Then the man who had received one bag of gold came. ‘Master,’ he said, ‘I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed. 25 So I was afraid and went out and hid your gold in the ground. See, here is what belongs to you.’
26 “His master replied, ‘You wicked, lazy servant! So you knew that I harvest where I have not sown and gather where I have not scattered seed? 27 Well then, you should have put my money on deposit with the bankers so that when I returned, I would have received it back with interest.
28 “‘So take the bag of gold from him and give it to the one who has ten bags. 29 For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have, will be taken from them.
It’s important to note that putting money in a bank to earn interest is very different from abusive lending practices towards the poor. And from what I have found in the Bible, I believe God views them as very different as well.
For more on lending money at a profit, this article is worth a read.
But what about investing in stocks? Is that Biblical?
Back to the original question and helping this reader get “unstuck when it comes to investing.”
I know our reader (who has been in many finance classes) probably understands this, but I want to break it down for anyone who doesn’t…
It is important to understand the difference between lending money and earning money from investments.
If you or I buy a bond, we are lenders.
So yes, even the old savings bonds that your grandma bought you. You were, in effect, a lender lending to the U.S. Government and getting paid interest.
And there are many other ways you can lend and earn money, but when you invest in stocks, real estate, a business, etc, you are not lending but investing.
So, using the example of buying a stock, when you buy a stock, you are buying shares of that company, meaning you are a part owner. And as a part owner, you are often rewarded with dividends as a way to share the profits.
And as a shareholder, the value of your shares may increase, in which you could personally profit as well.
The point is that this could be thought of the same way you would think about starting a business.
If you started a business, you would hope to make a profit so that you could eat and live indoors and keep the business in existence, right?
Well, when we own stock in a company like, say, Chipotle, you become a part owner (not a lender) of that business.
So, just like it is righteous and fair for you to start a business and expect to earn from it, it should be no different when you become a shareholder in a business.
Now, I’ll save the discussion of investing in morally compromised companies for another time, but the point that I want to be super clear is this:
When you invest in a stock, you are not lending money at interest, but (hopefully) you will be earning money from the capital appreciation and dividends of a great business.
Investing as a moral obligation
Additionally, I have taken the Parable of the Talents to heart, and I feel a responsibility to multiply what God has entrusted to me.
Yes that includes the actual gifts and talents He has given me, the relationships He has placed in my life, but also the money and possessions He has entrusted to me.
I am grateful that in my early 20s, I had a mentor who taught me how to multiply what God had entrusted to me by investing.
And those lessons he shared with me were essential in us reaching our biggest giving goal of being able to give $1 million by age 40.
I could have just as easily squandered the money He entrusted to me…
or I could have just kept it under my mattress, and we would have never been able to have nearly that level of impact with our giving.
So, all that to say, I view investing as a righteous act that allows for the advancing building of the Kingdom.
(If you are interested in learning my exact passive investing strategy, feel free to check out our 10x Investing course for more.)
Those are my thoughts, now it’s your turn
Anything I missed?
What would you add to this conversation?
If this was helpful, is there anyone you could share it with?
Your friend and coach,
