Plenty of people have found themselves in a pinch, financially. Maybe the car broke down, or the roof needed an unexpected repair. Often, those people have turned to those closest to them, for a little help. iLoan surveyed 800 people in July 2016 to learn more about the time-honored tradition of borrowing money from family and friends.
According to the survey, 97 percent of respondents reported they’ve borrowed money from friends or family at least once in their lifetime. The average amount over a lifetime - borrowed both by one-timers and serial borrowers - is $8,546.
Seventy-six percent of borrowing is done by teens and adults in their 20s. Most frequently, those borrowers turn to mom and dad for help. Also, interestingly, millennials are the generation most comfortable asking a boyfriend or girlfriend for money. Those needing a larger loan have the best luck with coworkers, receiving an average of $6,462. Per the survey, friends loan the smallest amounts, with an overall average of $3,319.
The top reasons people borrow money varies by age. Teens report needing it for education, to start a business, and for extra spending cash. Millennials ask for help with things like medical bills, car repairs and investment opportunities. Generation Xers use personal loans from friends and family for medical bills, basic necessities, and to buy or renovate homes.
The bad news for friends and family that lend is that only half are paid back in full. About one-third of borrowers pay back part of the loan and 14 percent say they don’t pay back a dime. Also, nearly nine out of 10 borrowers aren’t charged interest and three-quarters have no set due date (though coworkers, brothers and cousins are most likely to charge interest and enforce due dates).
When asked if loans put a financial strain on the friends and family lending money, 74 percent of borrowers say no; however, more than half of lenders say there is at least some degree of financial strain.
Looking at the personal relationships after a loan, 83 percent say it’s unchanged and 6 percent say the relationship improves. Per the survey, relationships suffer most frequently when grandkids borrow from grandpa, or when coworkers loan each other money.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of iLoan. The information in this article is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial, legal or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else. The parties mentioned in the article are in no way affiliated with iLoan. The author was compensated by iLoan for this post.