Proverbs 6:1-5 “My child, if you have made a pledge for your neighbor, if you have become a guarantor for a stranger, if you have been ensnared by the words you have uttered, and have been caught by the words you have spoken, then, my child, do this in order to deliver yourself, because you have fallen into your neighbor’s power: Go, humble yourself, and appeal firmly to your neighbor. Permit no sleep to your eyes or slumber to your eyelids. Deliver yourself like a gazelle from a snare, and like a bird from the trap of the fowler.”
Is being a cosigner for someone else on a loan always bad? Probably not, but you have to take into account the situation, the personalities of the people involved, and what will happen if the person defaults on the loan. Remember that Proverbs often deals with probabilities (things that are usually true). In general, it’s not a good idea to guarantee someone else’s debt. Being generous is something different. Being generous involves giving something directly to the person without expecting to be paid back. Becoming a pledge for someone else means that you could be paying back their debts for a considerable amount of time, which could have serious consequences for your family. This theme of not guaranteeing another’s loan is something that we’ll see repeated in Proverbs.
My wife and I have had opportunities throughout the years to cosign some loans. We’ve done some, and not others, depending on the circumstances. We’ve tried to be very discerning! Fortunately, we’ve never had an issue, but we have learned that personally loaning money is not wise. Sometimes repayment is an issue, and it affects relationships. Now we’re much more likely to give than to loan money or to cosign.