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23 May 2006
While the average amount of personal debt owed in the UK has hit £4,000 per person, it seems that Britons are also maxing out at the 'bank of Mum and Dad'.
People in the UK now owe around £65 billion to family or friends with 39 per cent of the population owing money to their nearest and dearest, new figures show.
However, many people have also experienced trouble with this kind of loan, with one in ten saying that they have had to repay debt suddenly because family or friends needed it back and eight per cent saying they have fallen out with friends or family over a loan.
Many said they had been put off from borrowing from banks and building societies due to early repayment penalties (45 per cent) or having to borrow a minimum amount that was too high (31 per cent).
"Problems can start when people start to borrow large amounts of money in addition to personal loans, overdrafts and credit cards because this can put a huge strain on monthly budgets and on personal relationships," warned John Goddard, managing director of Cahoot, which carried out the research.
"People shouldn't be tempted to see the 'bank of Mum and Dad' as an easy option, especially if they have already been turned down for loans elsewhere."
If you have been affected by debt and turned down for a loan, order your credit report now and see what lenders see.
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