April 15, 2009
4/15: Lending Money — All In the Family?
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?
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.
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.
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.