Don’t let loans from loved ones harm your relationship

If you need financial support, you might consider turning to friends and family for help.

And many will only do so as a last resort after being rejected by traditional lenders, like banks or credit card providers.

But while borrowing from a loved one might often seem like the easiest option, it can be costly in other ways.

Research by Fair4All Finance, seen by the BBC, found that this year alone, 26% of people have borrowed from family and 15% from friends. 

However, 9% of people who borrowed from family said it weakened their relationship.

And 17% of those who borrowed from friends said the same.

Why are loans from loved ones causing tension?

In some cases, relationships are being strained because the borrower and lender haven’t set out certain details in advance.

For instance, they had different expectations about repayments and how long they had to pay everything back.

And some close connections were stretched because the borrower was asked to pay interest on the loan.

In fact, figures showed that 16% of people who borrowed from friends and 8% who borrowed from family were charged interest.

How to stop a loan from souring your relationship

Money and relationships can be a tricky mix.

So if you feel you have to turn to friends or family for financial help, how can you make sure it doesn’t put your bond under pressure?

Be honest from the start

Talk openly about why you need the money, how much you need to borrow and when you expect to pay it back. 

Put everything in writing

It might feel formal, but putting your agreement in writing means everyone knows what’s expected of them and makes misunderstandings less likely later on.

Stick to your word

If you make a promise regarding your loan, stick to it.

It shows you’re not exploiting your loved one’s generosity and that you’re taking the loan seriously.

Speak to a debt adviser

If you’re struggling with bills or debt and thinking of borrowing money, it’s worth speaking to a debt adviser before turning to friends and family.

We can check you’re getting all the benefits you’re entitled to and help you create a realistic budget, so you can prioritise your spending, keep up with essential expenses and plan for the future.

And if you’ve fallen into debt, we can give you confidential, practical and impartial debt advice.