Radio personality and finance guru Dave Ramsey recently posted a clip on X where a caller, Jim, stated that his church was asking him to cosign a $2.3 million expansion loan. Right off the bat, Ramsey strongly advised against it.
“Well, I’m kind of weird,” Ramsey said. “I think churches ought to follow what the Bible says. And 17, 18 Proverbs says, ‘One lacking in sense cosigns for another.'” He stated that especially as a religious institution, a church should not be asking this of its members.
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Ramsey consistently discourages people from cosigning loans, as it exposes individuals to unnecessary risk and can ruin relationships.
This isn’t the only occurrence of a Ramsey Show personality talking about cosigning for church expansions. Co-hosts Ken Coleman and George Kamel also took a call where the caller described how his church was pursuing a $3 million loan to fund a building project.
The caller explained how the church received weekly offerings of $15,000 but still needed someone to cosign a loan that would hold them personally liable for monthly payments of $17,000. As a leadership team member at the church, the caller was uncomfortable with the idea of this and said it threw up some red flags for him.
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Kamel and Coleman questioned why the church would seek personal guarantees from its members if its financial health were truly stable. “The reason they need they guarantors is ‘cause the lender doesn’t believe the church has the finances to pay the loan,” Kamel stated.
Coleman agreed and emphasized that church leadership should not be shifting financial responsibilities onto its members, particularly for commitments that the church should be able to manage. Drawing from his own experience in church environments, Coleman said that it’s easy for well-intentioned leaders to get excited about growth opportunities, but that this enthusiasm shouldn’t come at the financial risk of the congregation.
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Churches in the U.S. regularly seek loans for building expansions, renovations, and other large projects. Since churches often rely on fluctuating donation income, lenders may hesitate to issue large loans without additional financial security, such as a cosigner. While some lenders specialize in church financing and might not require a personal guarantee, others see cosigners as essential to mitigating risks, especially for projects over $1 million.
