Is Borrowing Money Ethical?

The financial world revolves around borrowing and lending. After all, isn’t a mortgage simply a loan that we have told ourselves isn’t a loan? If you are thinking about short term loans for example, you need to understand the negative effects it can have on you as well as the advantages.


There are several advantages to borrowing. These include:

  • Gives people credit: The world could not function without credit and this is what lending and borrowing facilitates. We need credit for all kinds of things whether that means emergency loans or if you need to pay for something unexpected.
  • Convenient: The whole point of legalising short term consumer credit was to get rid of loan sharks who have been treating members of the community badly in the past. This is why it is ethical to have consumer credit lenders that give people access to fast cash loans online as options to alleviate their financial worries.
  • Simple application process: When people apply for mortgages they embark on a tedious process path with numerous layers of paperwork and meetings. Other types of loans do not have as long of turnaround time which makes them appealing to people who want to borrow money quickly.


  • You have to be sure you can pay the loan on time: This is the most important element to borrowing. Whether it is a short term loan, personal loan or a mortgage, you have to be absolutely sure that you can afford the repayments with interest on your current salary.
  • Can’t borrow sky-high amounts: Commercial lending is the only sphere where you can borrow large amounts of cash because these loans tend to be used for funding large projects. Anyone who wants to borrow large amounts for personal use should consider saving for their purchase.
  • Interest levels can be high: In Islamic banking, there are specific rules about how much interest can be levied on a loan. There are different schools of thought on whether interest is ethical or not. On one hand, interest should be levied because a loan is a product and a legal obligation to pay the money back. On the other hand, interest rates for some loans can be extremely high and some customers are unable to keep up with payments.

So, what do you think? Is borrowing money ethical?
Guest Post Author Bio: This post was written by Sophie Wright.

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