Borrowing money from or to friends and family can often lead to debt management problems for all concerned, one expert has warned.
Stephen Rose from the Debt Advice Bureaux suggests that there are financial risks involved with lending to friends or family, particularly if no written agreement has been drawn up by the two parties.
Furthermore, he claims that the risk of debt problems is more acute if an individual has taken on a loan in order to lend that money to someone else who could not secure the cash themselves.
“Where the family member that’s lent to them has borrowed the money themselves… that magnifies the problem,” said Mr Rose, who is the director of the not-for-profit organisation.
“Because if… the repayments they were expecting from their family member aren’t coming forward, then there’s almost a domino effect there.”
A quarter of all British adults have added to their debt management burden over the course of the past three months, figures from MoneyExpert.com revealed recently.