The Consumer Credit Counselling Service (CCCS) recently highlighted the trend of borrowing money from friends and family in order to other debts, with almost 1-in-5 people doing so.
Debt Free Me are hearing from a growing number of people who are having their debts (at least partially) paid off with loans from friends and family. The average borrowed is around £3,500.
This form of 'debt management' can be great, there's generally no interest and your credit rating isn't affected. However it can cause huge problems to your personal relationship.
Delroy Corinaldi, director of external affairs at the CCCS stated: “Many people turn to family members or friends for a loan when they are struggling to cope – especially where obtaining credit is difficult because of a poor credit history.
“However, borrowing in this way can place an enormous strain on friendships and family relationships, and should be considered very carefully.”
Borrowing from friends and family is often the start of a slippery slope and can have a detrimental affect on both parties. We have found that in many cases, people that have borrowed money to pay off debts quite often end up coming back to us at a later date.
If you are struggling with debts then call an expert for no obligation debt advice on 0800 988 7701.
