Loaning to loved ones can be complicated
Loaning money to friends and relatives, could lead a proportion of UK residents into a “sticky” financial situation.
One of the world’s most successful online transactional institutions has discovered that amidst changing borrowing conditions within the UK, more people than ever are turning to loved ones and friends as a means to source a loan. However, the company has suggested that individuals who do decide to loan money could be running the risk of future debt difficulties.
A spokesperson for the firm commented that over 40% of consumers have loaned money to friends as some point in their lives, however, due to the awkwardness of asking for the funds to be repaid, an additional 70% state that they have never had the money back, which has then contributed towards their own financial problems.
One expert suggested that individuals, who do decide to lend money to their friends and family, must ensure that a set of terms is agreed at the outset. There is nothing strange, or indeed wrong with forming an informal agreement before any money is lent, and on most occasions a family borrower will think little of the gesture. Ultimately, individuals who do decide to act as lenders, must ensure that by doing so, they are not risking their own financial health.
