BRITS will turn to their family and friends to borrow cash for unexpected car repairs, university fees and even buying a new home.
A study questioned 2,000 adults about their financial habits and found they are comfortable asking a loved one for an average of £1,500 at any one time.
And borrowers have been loaned a total of £3,400 from their nearest and dearest in the last five years – to fund big life milestones such as weddings and also to cover everyday purchases like buying a coffee or lunch.
But although it’s become part of everyday life, 30% found it an awkward experience, and nearly half (45%) ended up regretting it.
The research, commissioned by Shawbrook Bank Personal Loans, also found a third of women (33%) typically feel uncomfortable asking to borrow money, compared to a quarter (24%) of men.
And 77% even choose to avoid the topic entirely unless in the case of an emergency.
Sally Conway, head of consumer communications at Shawbrook Bank, said: “We’re a nation of borrowers and for many this could mean borrowing from loved ones to help fund our big life moments, as well as the little things we need.
“But, borrowing money is not a decision to be taken lightly and even if it’s from friends or family, you need to have clear terms agreed from the outset or things could get tricky.
Most read in Money
IN GOOD NICK 
Mansion goes on sale for more than £2m – you won't believe what it used to be
Sky broadband goes down leaving hundreds of customers without internet
Just WEEKS left to make sure you get a £150 council tax rebate – here's how
Millions of families on Universal Credit to be worse off from April
"Talking it through and having things in writing – including how much is borrowed, repayments and timelines can help to avoid any unnecessary awkwardness later down the line.
“This is a necessity when borrowing from a bank, and the same principles should be applied to any form of borrowing.”
The research also found more than half of adults have previously turned to a financial lender rather than seeking help from family and friends.
This is due to the lack of awkwardness (45%), not compromising a relationship (45%) and it being an "official route" (37%).
The average adult has borrowed an estimated £8,000 in unsecured credit in the last five years.
And the typical adult would be comfortable seeking a sum of £11,000 from their bank in the future.
Covering the cost of a car was the top reason to consider applying for a loan while more than a third (34%) would finance home improvements with help from a lender.
But the survey, conducted via OnePoll, found many don’t do their homework when it comes to borrowing as only 29% would spend time researching before making a decision.
Just under half (44%) would take the time to understand the APR while only 41% would work out a budget before committing to the loan.
Sally Conway added: “Our research has found that alarmingly even when borrowing from financial institutions, not everyone is crystal clear on what they are signing up for.
“Financial lenders will always carry out certain checks on affordability when you borrow money and will set terms and conditions before lending money – it’s really important to review these in detail and make sure you understand them.
“At Shawbrook, we want to help our customers better understand the ins and outs of borrowing.
"Knowledge is power and its important consumers know what they’re signing up to right from the start, which is why we offer a range of guides and tools to help people navigate the world of borrowing better.
“We believe in being transparent and fair with everyone by providing guaranteed personalised rates on our personal loans, with no impact on your credit score when you apply for a quote.
"It’s really important no matter what you’re borrowing for or from who, to be clued up and do your research before you enter into any agreement so that you can make an informed decision on what’s right for you.”
Top reasons to borrow cash from family and friends:
- To cover unexpected costs, such as home or car repairs
- To pay for household bills
- To pay for smaller items such as coffee, lunch, bus fares etc.
- To pay off an existing debt
- To buy a home
- To buy a new car
- To finance home improvements
- To cover private medical expenses
- To cover the rising cost of living
- To fund education, including attending university
- To start a business
- Moving expenses
- To pay for a holiday of a lifetime
- To get married
- Childcare
Top reasons to borrow cash from a financial lender
- To get a new car
- To finance home improvements
- To buy a home
- To cover unexpected costs, such as home or car repairs
- To pay existing debt
- To start a business
- To cover private medical expenses
- To pay for a holiday of a lifetime
- To fund education (including attending university)
- To cover moving expenses
- To cover the rising cost of living
- To improve credit rating
- To pay for household bills
- To get married
- To take sabbatical leave from work
We pay for your stories!
Do you have a story for The Sun Online Money team?
Email us at [email protected]
Source: Read Full Article
