Charity Finds More People Borrowing From Loved Ones
According to the information, 28 percent of the charity’s client owe their family and friends money; it was just 20 percent in 2014. The average amount people borrowed from their loved ones is £4,046, which is an increase of £870 over two years’ time.
StepChange said debt like this could ruin relationships. 31 percent of the 1,000 polled who are experiencing a financial hardship said there were negative effects in the relationship with the person who caused the financial issues. Five percent of these relationships ended in a break-up.
16 percent said their financial difficulties had caused problems with friendships, with three percent claiming the friendship fall apart due to the debt. 16 percent said their financial problems were also negatively affecting their family relationships. Four percent of folks said the relationship with the lending family member fell apart.
According to the charity, borrowing from people you love does not address the problem that led to the debt and may make things worse.
How do you know if you’re in a financial difficulty?
You only make the minimum payments on credit commitments three or more months in a row
You fall behind on important bills – electric, gas, etc.
You use your credit cards to pay the important bills – electric, gas, car insurance, etc.
You borrow to make your credit payment
You continually get hit with late payment fees and overdraft charges
StepChange Debt Charity Chief Executive Officer Mike O’Conner said while family and friends can support their loved ones, lending money tends to have serious repercussions. If any repayments are missed and the money is needed, the debt can lead to serious relationship damage. While it’s normal to want to lend money to loved ones, if a person is already in financial problems, then borrowing money isn’t going to address the whole problem.
O’Conner said people need to take immediate action to address their debt problems and use advice to get them out of debt for good.