Research released by price comparison site Money Supermarket shows that as many as 55% of Brits resort to borrowing money from family and friends. Indeed the average unsecured loan is £2,227.
Mothers come out as the most generous lenders with 42% of all loans coming directly from the Bank Of Mum, with Dads a close second lending 32% of loans.
People borrow for a whole host of reasons, but the most common reasons are to pay for urgent financial matters and to buy a new car both at 22%. 19% of people cited money for a house deposit. Of the 2000 UK adults in the survey around 40% said they had borrowed money from the Bank of friends and family to avoid paying interest on an outstanding loan.
The Money Supermarket research found that those aged from 35 to 44 years were most likely to borrow money from family, with 61% of this age group turning to family members. The most popular reason was to help to buy a new car. This demographic also borrowed the most, with an average of £2,479. Not too far behind were those aged 25 to 34 years, borrowing an average of £2,258 to help fund a house deposit.
The research also showed that on average Brits take an average if 11months to pay back loans from family members, with 35-44year olds taking the longest at 13 months but 24-44years olds’ paying back in just 10 months.
Money Supermarket consumer affairs spokesperson Rachel Wait also reiterated that borrowing money from a family member isn’t necessarily the only option.
“There are plenty of ways to borrow responsibly and pay off what you owe at a manageable rate, such as a credit card with a 0% interest period; in some cases, this means you have two years or more to spread out your repayment. Certain current accounts also offer an interest or fee-free overdraft, which could be another option for the fifth of Brits that need money urgently,” she added.
In her opinion, the most important thing is to carefully consider all the options and don’t panic into taking our credit with high interest rates.
“Consider your options carefully and if you do need to borrow money, having a plan in place will help ensure you stay on top of your repayments,” she added.
Indeed with unsecured loans now at close to record low rates, and an increasing number of products available for those with less than perfect credit, you may not have to rely on the Bank of Mum and Dad or friends and family after all!