This topic always stimulates much discussion, because most people follow one of two extremes- abstinence or indulgence. One group thinks that borrowing is a sin and Christians should avoid it, while the other group believes that one of God's miracles is a low-interest loan. Both views are cloaked in religious folklore (something that sounds spiritual but is not scriptural).
Borrowing is an ancient concept, one discussed thoroughly in the Bible, as are many financial principles. The difficulty is that we live in an economy awash in debt, and the Bible promotes a debt-free mentality. Unfortunately, even our churches have a debt-first mentality.
Borrowing is not prohibited by Scripture, but basic rules are given for the use of it. Most Christians have violated one or more of these rules, not out of disobedience, but out of ignorance. "The wicked borrows and does not pay back, but the righteous is gracious and gives."
Although it's not from Scripture, the quote, "Neither a borrower nor a lender be," from Benjamin Franklin's Poor Richard's Almanac is often mentioned. The Scripture very clearly says that neither borrowing nor lending is prohibited, but there are firm guidelines.
First, let's discuss borrowing. It's discouraged, and in fact, every biblical reference to it is a negative one. Consider in the Book of Proverbs- the rich rules over the poor, and the borrower becomes the lender's slave."
The scriptural guideline for borrowing is very clear. When you borrow money, it's a promise to repay. Literally, borrowing is making a vow. God requires that we keep our vows. The Psalmist says, "The wicked borrows and does not pay back." Therefore, if we don't want to be counted among the evil, we are to repay everything that we owe.
In Biblical times, when a man borrowed money and couldn't repay, be was thrown into prison, and his family was sold into slavery. When somebody gave his word and then didn't keep it, that person greatly dishonored himself. It was worse than stealing because a trust was violated.
Just because we don't throw people into prison today doesn't make the trust relationship any different. Scripture shows us that we're to be cautious about borrowing, and it should never be the norm. Yet, when you look at our society, you find that borrowing is rampant. We think it's normal to borrow for periods of thirty to forty years. We have created an economy that borrows to exist. That is not God's way. God says in the book of Deuteronomy that borrowing is a consequence of ignoring His statutes and commandments.
References: Psm. 37:21, Prov. 22:7, Deut. 28: 43-45, Answers To Your Family's Financial Questions by Larry Burkett, Living Books- Tyndale House Publishers.