Brits lend £65bn to friends and family
While headlines are being made by Britain's official debt figure, new research shows that some £65 billion has been leant unofficially, with no paperwork ever being done.
Unofficial lending between family and friends is far more widespread than people think, with two people in five owing money - at an average of £3,704 each, research from Cahoot finds.
But rather than being an easy, interest-free way of getting cash when in a tight spot, Cahoot reveals that borrowing from friends and family can be highly problematic.
One person in five has been made to feel guilty for borrowing the cash, one in eight feels forced to lend money back at some point, and one person in ten is forced to suddenly repay the loan as the lender needs the money back.
"Borrowing money from friends or family is fairly commonplace where relatively small amounts of money change hands," said Cahoot managing director John Goddard.
"Often that debt is waived, especially for loans from parents to their children, and we accept that this is part of life.
"However, problems can start when people start to borrow large amounts of money in addition to personal loans, overdrafts and credit cards because this can put a huge strain on monthly budgets and on personal relationships.
"People shouldn't be tempted to see the 'bank of mum and dad' as an easy option, especially if they have already been turned down for loans elsewhere."
And these unofficial loans have a habit of turning 'personal'.
One loan in 12 leads to friends or family falling out, more than one in four end up 'repaying' the loan with favours - such as DIY, housework, baby-sitting and cooking meals - and one person in ten has to borrow money to finance the unofficial loan in the first place.
"Money is a subject close to many people's hearts and, as anyone who has played Monopoly will testify, it can cause family arguments," Mr Goddard said.
"There are hassle-free ways to borrow money from a bank."
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