Lending Between Family or Friends is Likely to Result in Guilt, Hurt Feelings, or Regret, According to Survey
More than 60% of Americans have borrowed money from or lent money to friends and family in the last five years, according to online marketplace LendingTree’s recent survey of over 1,000 Americans. Maybe they should have gone to their credit union.
With 35% of those who have lent money nearly a third of borrowers and lenders reported negative consequences resulting from the loan, ranging from hurt feelings (14%) and resentment (10%) to irreparable harm to the relationship (4%).
- 44% have borrowed money from a family member or friend in the last 5 years. Parents (43%), siblings (19%) and friends (19%) were the most common lenders among respondents.
- 51% have loaned money to a family member or friend in the last 5 years. Siblings (27%), friends (26%) and parents (17%) were the most common borrowers among respondents.
- 24% of family/friend lenders regret their decision to lend money in the first place.
o More than one third have not been repaid
Nearly a third of borrowers and lenders reported negative consequences resulting from the loan:
Hurt Feelings: 14%
Decreased Contact: 10%
Verbal Arguments: 8%
Uncomfortable Family Gatherings: 6%
Irreparable Harm to Relationship: 4%
More than 1 in 5 borrowers (22%) have not yet paid back their family member or friend. The costs of not paying back their loan could be adding up, as 11% said they were charged interest.
65% of borrowers felt guilty about asking their family member or friend for a loan. Despite the guilt, 67% said they wouldn’t hesitate about asking for another loan.
Americans are more willing to lend and borrow from family than friends
A quarter of survey respondents said they would not give their friend a loan, while only 17% said the same for family members.
When it comes to borrowing, the amount someone is willing to borrow increases when borrowing from a family member. For amounts more than $20,000 they were more likely to request help from a family member than a friend.
Similarly, survey respondents were also more likely to lend larger amounts of money to family members. Respondents were twice as likely to be willing to lend an amount over $20,000 to a family member than to a friend.
It is worth nothing that millennials are the most likely generation to borrow money from and lend money to loved ones.
Overall, 64% of millennials have lent money to friends/family in the past 5 years, and 59% have borrowed money from friends/family in the same time frame. Additionally, only 15% of millennials would not consider lending money to a friend, compared to 21% of Gen Xers and 38% of Baby Boomers who would not consider lending to a friend.
Avoid Fights with Family and Friends: Go See Your Credit Union
Your local credit union has some of the best deals on personal loans and credit cards. Rather than start a family row when borrowing, perhaps you should try your credit union first?
Copyright Today’s Credit Unions