Some people claim to interpret the Bible literally while others say that they interpret it figuratively. I say, “Holy Oversimplification, Batman!” It is absurd to say that one intereprets the etire Bible one way or the other.
Parts of the Bible are obviously figurative. Observe:
“I am the door; if anyone enters through Me, he will be saved, and will go in and out and find pasture.” –John 10:9 (NASB)
Not only is Jesus not literally a door, but we are not literally sheep. Besides, if Jesus is the door, then how can he also be the Shepherd?
“I am the good shepherd; the good shepherd lays down his life for the sheep.” –John 10:11 (NASB)
These statements of Jesus are obviously metaphors. They should be taken metaphorically, not literally.
When certain Christians say that they interpret the Bible literally, it is shorthand for saying that they believe that the events narrated in the Bible took place in actual history and that the people mentioned as historical figures in the Bible actually existed.
The tricky part is knowing when to take a passage literally and when to take it figuratively. Fundamentalists take the cautions, conservative approach and assume that everything in the Bible is literal, unless there is a clear indication that it is not. Thus, they believe that Jonah was a real man who was actually swallowed by a real fish of some sort. Liberal Christians take the strictly logical and naturalistic approach that many things in the Bible are not plausible as literal fact. They can accept that the story of Jonah has value as a story but not as history. They may even accept the possibility that some details of the story are true–but not all.
How do you understand the implausible parts of the Bible? Do you accept all of them as supernatural but real events? Do you reject all of them as impossible? Do you accept some but not others? Do you tentatively accept them but leave room for doubt?
My own approach is to lean toward accepting everything in the Bible as literally as possible but to be open to the possibility that some passages that I take literally were not meant to be so. In other words, my faith in God would not be shaken if I found out that some Bible stories were illustrative rather than historical.