Think Money

Think Money

December 03, 2010 11:57 ET

Take Care Over Loans to Friends and Family

LONDON, UNITED KINGDOM--(Marketwire - Dec. 3, 2010) - Financial solutions company Think Money (http://www.thinkmoney.com/) has advised people to act with caution when it comes to lending large amounts of money to friends and family, after research by MORE TH>N found that there is an outstanding debt of £44.6 billion between borrowers and their friends and family in Britain.

The average Brit lends a total of more than £2,250 to friends and family in their lifetime. But two in five people (40%) who borrow money in this way say they won't be able to afford to repay what they borrow, while 24% say they have borrowed from friends or family with no intention of ever paying the debt back.

Meanwhile, just under one in three people (32%) say that this type of borrowing has caused irreparable rifts with friends or family.

A financial expert at Think Money commented:

"Friends and family can sometimes provide a 'quick fix' in difficult times - whether it's £10 for a few pints at the pub or £100 to help with rent payments. Most people have borrowed in this way at one time or another, usually without any issues.

"Of course, there is always the danger that they won't be able to repay what they owe. This might not be so serious for smaller loans, but if there's a lot of money involved the consequences could be severe for both the lender and the borrower.

"A lot of the time when people ask friends and families for bigger loans, it's because of a more serious financial problem - 'borrowing from Peter to pay Paul', so to speak. But for people who are struggling to repay their debts, it could be a much better idea to tackle the problem head-on and find a suitable debt solution, such as a debt management plan (http://www.thinkmoney.com/debt/debt-management/).

"Most people feel a sense of responsibility to help their friends and family in times of need, but lending any more than you can afford to do without could cause problems."

Notes to Editors

Think Money is one of the UK's leading financial solutions providers, delivering a comprehensive range of financial solutions, including loan, insurance and banking solutions.

Think Money defines its mission as 'To educate, rehabilitate and advise on all aspects of financial management'.

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