There’s danger in putting up security for a stranger’s debt; it’s safer not to guarantee another person’s debt. Proverbs 11:15 (NLT)
To guarantee a loan means to assume the responsibility of paying the debt of another person if that person fails to repay the loan.
The Word of God says no three times to this practice. In the mouth of three witnesses a matter is established. The established position of God concerning co-signing or guaranteeing a loan is an emphatic no.
It is reasonably understandable if it’s for a stranger but what about a friend, relative, family member? It’s still a no!
Proverbs 17:18. (NLT) It’s poor judgment to guarantee another person’s debt or put up security for a friend
When you take on the responsibility of paying the debt of another person, you’ve just got yourself into debt.
God in His Word calls it poor judgement or lacking sense. Proverbs 17:18 A man who lacks sense cosigns a loan, becoming a guarantor for his neighbor. (ISV)
You get trapped in a debt you did not personally take.
Proverbs 6:1-4 (NLT) 1My child, if you have put up security for a friend’s debt or agreed to guarantee the debt of a stranger— 2if you have trapped yourself by your agreement and are caught by what you said—3follow my advice and save yourself, for you have placed yourself at your friend’s mercy. Now swallow your pride; go and beg to have your name erased.4 Don’t put it off; do it now! Don’t rest until you do.
When we are in debt we are in bondage because the borrower is slave to the lender-Proverbs 22:7.
You also risk losing all your possessions.
Proverbs 22:26-27 (NLT) Don’t agree to guarantee another person’s debt or put up security for someone else. If you can’t pay it, even your bed will be snatched from under you.
Your relationship with the person you guaranteed for can be damaged if he or she failed to pay. Your own ability to secure future loans for yourself diminishes.
All these things bring suffering.
Now I admit I have guaranteed loans before, that was not so wise but thank God all those instances the guarantee was up to a certain amount of money and it is safe to say I risked losing that money. But you may say its my money I can do whatever I want with it; Wrong! – All that we have belongs to God (Psalm 89:11), we are just stewards (1Peter 4:10), God will require of us to give an accountability of all that He gave us (Romans 14:12).
Going forward as believers since it’s always in our hearts to want to help out those in need especially those closest to us. Godly wisdom here is when you see someone who is doing his very best to forge ahead in life, but it’s rough riding for them, as you are led in your heart and according to your ability give them money without conditions.