Lending Between Family or Friends is Likely to Result in Guilt, Hurt Feelings, or Regret, LendingTree Survey Finds
- 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.
- 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%
- Resentment: 10%
- 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
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
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.
Why Americans are borrowing and lending money to others
Needing to borrow money from a loved one is usually not something you expect to happen. But sometimes, it may be the most practical and affordable option for borrowing money. The following are just a few reasons why Americans are lending or borrowing money:
- Monthly Housing Costs (rent, mortgage)
- Borrower: 22%
- Lender: 21%
- Auto Expenses
- Borrower: 14%
- Lender: 16%
- Pay Off Debt
- Borrower: 11%
- Lender: 13%
- Child-Related Expenses
- Borrower: 11%
- Lender: 10%
- Medical Costs
- Borrower 9%
- Lender: 8%
Full survey findings and additional details can be found here: https://www.lendingtree.com/personal/study-lending-between-family-friends/
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