4/15: Lending Money — All In the Family?

April 15, 2009 by  
Filed under Family Finances, Featured, Money, Money Vault

If you’ve been asked for a loan, you’re not alone.  In fact, a majority of Americans — 57% — say a friend or family member has asked to borrow money from them.  So, who are the borrowers?

©istockphoto.com/jgroup

©istockphoto.com/jgroup

Usually, it’s a brother or sister, according to 30% of those who say they have been approached for a loan.  A child or grandchild sought money from 21% of would-be lenders.   And, nearly 1 in 5 — 19% — has been approached by a friend. Does your income influence who may ask you for money?  25% of those making less than $50,000 a year who were asked for a loan were hit up by their kids.  But, among those earning $100,000 or more who’ve been approached for a loan, it’s more likely to be a brother or sister who does the asking.

Table: Has a family member asked for a loan?
Table: Which family members are seeking a loan?

Making Borrowers Accountable?

58% of U.S. residents who have been asked for a loan say they did lend their relative or friend all or some of the money.  Another 26% actually gave the borrower the money as a gift.  And, of those who agreed to provide a loan for some or all of the requested money, most — 92% — say they didn’t write up or sign a formal agreement to pay it back.

Table: Did you loan them the money?
Table:  Sign a Formal Agreement?

A Lasting Impact?

So, how does a loan affect the relationship between the lender and the borrower?   More than three-quarters –77% — of those who have been approached for a loan say it makes no difference whatsoever.  And, out of the 23% who report it does make a difference, almost two out of three say it’s for the better.

Table: Does it impact the relationship?

Marist Poll Methodology

Related Stories:

Future of the Economy

Americans Cutting Spending In Time of Economic Crisis


Related Links:

Loaning Your Kids Money

Lending Money to a Family Member

Things to Consider If Lending Money to Family

Lending Money to Friends and Family

The Perils of Lending Money to Family

Family Loans Can Raise More Problems Than They Solve

Comments

2 Responses to “4/15: Lending Money — All In the Family?”

  1. Lynn on April 22nd, 2009 2:17 pm

    My husband’s 23 year old neice was trying to buy a $500,000 house. Since she did not have a job and can barely support herself, she asked her mom (my husband’s sister) for the entire $500,000. Her mom, who spoiled her all her life, agreeed to give her $400,000, but asked us to chip in $100,000. I told her we do not have that much money. My husband’s sister said “don’t lie, I know you have the money.” She then did a detailed financial analysis with us (how many years we worked, how much we make each year and how much we spend each year). Based on her calculation, she believed that we had at least $300,000 in bank. I did not dispute and just said I could not loan(give) her daughter $100,000 as we still have 3 young children and we need to save for their college fund and our own retirement. Instead, we wrote her a $1,000 check (which she cashed) and said it was a gift. The relationship went sour. Both my husband’s sister and niece resent us and never call us again. Even my husband’s mom is upset that we did not loan some money to his niece. It is really hard to handle thse types of situation and I don’t know how we could have handled it better.

  2. My Family Tree on August 23rd, 2010 2:15 pm

    I agree lending money to any friend or family member can lead to disaster.I have found out if you would like to never see a friend or family member again just give them a loan.

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!