Financial Discipleship – the Bible on Cosigningਨਮੂਨਾ

The Bible is very clear on avoiding cosigning at pretty much all costs. But if our loving God is not about condemning us, what do you do with this kind of instruction if you already have a cosigner on your loan or cosigned someone else’s loan and can’t get out of it?

Now, the Bible may not give vivid, step-by-step instructions for these scenarios, but by studying His Word, we get to know the character of God, and we can ask Him to give us wisdom.

In either scenario, first rely on the power of prayer to tell the Lord about your concerns and listen to what He has to say.

If you already have a cosigner on a loan...

1. Investigate the case. Don’t wait around wondering if your cosigner is going to ask you to release them from your loan. Find out what it would take for you to prove to the lender that you can handle paying off your loan without a cosigner.
2. Take ownership. Do everything you reasonably can to fulfill these requirements to prove you’re responsible and able enough to make your payments on time.
3. Communicate with the cosigner. Remember, cosigning is a huge risk. And agreeing to cosign is graciously generous—whether a cosigner realizes the risk or not. Tell your cosigner how much you appreciate them, but share about your plans to release them of this burden. You may be surprised how meaningful it is for them to hear how much you care about their financial well-being too.

If you can't get out of a loan you cosigned...

Be persistent

Even if the answer was “no” the first time, it doesn’t mean you should give up. Proverbs 6:3-5 instructs us not to stop until we’re released. Respectfully explain to the borrower what you’ve learned about the dangers of cosigning, and pray that they’ll understand your perspective.

1. Be prayerful. It goes without saying that the power of prayer is undeniable. Remembering to involve the Lord in every matter is paramount. Sometimes, our own might isn’t enough. Some things can only be achieved by God’s might.
2. Be proactive. While you’re still a cosigner, find out how you can help the borrower. For some cosigners, giving the borrower an incentive to pay off their loan early, such as matching a portion of their payments, may be very helpful. For others, pointing them to resources—such as organizations that are equipped to help through educational programs, social services & relief, etc.—can give them the boost they need. And for others, encouraging the borrower to learn about biblical financial wisdom by joining a financial discipleship study may be a blessing to both the borrower and you, the cosigner.
3. Be prepared. A Federal Trade Commission study found that 50% of those who cosigned for bank loans and 75% of those who cosigned for finance company loans ended up making the payments. Include the debt in your budget, in case the borrower can't pay. Manage your finances to the best of your ability as you seek and depend on the Lord.

Whatever the circumstance—whether in cosigning or in the grand scheme of life—know that God only provides instructions to His children because He cares and wants nothing but the best for us.

In the moments you find yourself living contrary to God’s Word, just remember He is always willing to meet you where you are. The Lord will never leave you stranded with no way out. Don’t give up. Trust Him and do your part, even if you think it’s small. In your faithfulness, He will get you out of any mess.

With thanks,

Melody Stampley

Content Specialist, Compass