Borrowing money from friends or family

Do you rely on friends and family for money?

 
32% of people in the UK have borrowed money from friends or family, according to research from Equifax.
 
It found 31% of these loans were to pay for household essentials such as food, 23% to pay for car repairs and 18% to pay for utility bills.
 
In many cases loans were taken to help pay rent, mortgage payments or debt, with 13% of respondents needing the money to help with housing costs, 11% to help pay off credit cards and 4% to pay off a short term lender.
 
The bank of mum and dad seems to be an increasingly popular choice due to escalating house prices and tuition fees.  The increased financial pressure on the younger generation has meant that 29% of those under-35 have asked family or friends to help with a house deposit.
 
According to uSwitch.com, parents are expected to fork out £5.8 billion over this academic year to help out their university-bound offspring, and the Equifax survey found that student loans are the biggest proportion of debt for 19% of the UK.
 
Generally people seem quite happy to lend money to their family and friends, with half of people surveyed by 360vouchercodes.co.uk saying they would offer up to £500, though they would be happier lending to family than friends. 
 
Lenders are willing to allow almost nine weeks for family to pay back loans– with 33% saying they would be willing to wait more than three months. However friends can expect to have to pay it back within 6 short weeks. 
 
Everyone receives an unexpected bill once in a while, but before you pick up the phone to borrow from your parents or best mate, you may want to consider the impact this could have on your relationship. 20% of Brits questioned have fallen out with family and friends who have failed to pay back debts.
 
Ironically, 32% of those surveyed admit they’ve paid someone back later than agreed.
 
David Rodger, CEO of Debt Advice Foundation said;
 
“Borrowing from friends and family is low-risk and is usually interest-free so definitely has its benefits. However if you borrow knowing you can’t repay the loan or run into difficulty, you take the chance that you can damage your relationships. A support network is very important for those struggling with debt.”
 
If you are struggling to manage your finances, you can speak to a debt adviser in complete confidence on 0800 043 40 50.