Dave Ramsey is probably injecting a lot of wisdom when he discourages loans among friends and family (and he is definitely right about co-signing). But I think he’s wrong to claim that it is always wrong to loan to someone in need.

Here’s the law from Exodus 22:

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. If ever you take your neighbor’s cloak in pledge, you shall return it to him before the sun goes down, for that is his only covering, and it is his cloak for his body; in what else shall he sleep? And if he cries to me, I will hear, for I am compassionate.

And then from Deuteronomy 24:

When you make your neighbor a loan of any sort, you shall not go into his house to collect his pledge. You shall stand outside, and the man to whom you make the loan shall bring the pledge out to you. And if he is a poor man, you shall not sleep in his pledge. You shall restore to him the pledge as the sun sets, that he may sleep in his cloak and bless you. And it shall be righteousness for you before the Lord your God.

So God envisions a world in which it is helpful to the poor man to make a loan to him. I think the reason for this is that, in the Bible, temporary slavery is seen as a way of re-starting one’s life (six years and then freedom with some initial capital).

Notice the qualifications though.

1. Only one loaner. If you offer up your only cloak as pledge you can’t offer it again as collateral for another loan. No plurality of credit card companies.
2. You know your loaner. He’s your neighbor who can take your pledge in the morning and give it back at night.No help from multinational corporations and their millions of stockholders.
3. No one gets to grope into your pants house (sorry, TSA moment). The loaner has to wait outside. He is not an absolute master. Your home is your own land and your castle even when you owe money.
4. Emergency loans for the poor do not go out at a massive interest rate to cover the risk. Save that for business loans. Once again Credit Card companies offering checks for financial “emergencies” are evil.
5. The concept of unsecured debt is simply unthinkable.