Life is full of challenging moments that often come at a high cost. In 2021, Americans continued suffering from the consequences of the COVID-pandemic. While many people struggle to make ends, they had to seek the ways of handling their bad credit loans. Interestingly, almost a third of Americans prefer to take out money from private lenders rather than borrowing money from your family and friends. Here are the highlights to know:
- Funding services between loved ones happen to be a common thing. More than 50% of Americans have taken out money from their loved ones. An average lender approves a loan amount of $1,500 from HartLoan 1 hour payday loans no credit check. An average borrower takes out $1,000.
- Requesting help from a loved one is a last point for many people who are struggling. Almost 30% of Americans would rather get money online than ask people they know for help.
- Those lending money to the people they know may regret their decision. More than 40% of Americans have lent money to a loved one, 25% regret doing so, and 84% decide to lend money again.
- Most Americans feel uncomfortable borrowing money from a loved one. More than 35% have taken money from a loved one and 70% felt upset asking for money.
More Issues Caused by Borrowed Funds
Borrowing money has become a popular solution to financial problems in the United States. More and more people try it out. And here are some more details to know.
53% of Americans borrowed money in 2021
Those Americans who need a bit of money to address their needs might consider charging their credit card and taking out a cash advance. But if they have the ability to borrow the money from a loved one, then they might try this option. After all, it doesn’t bring interest rates and service fees.
Although the lending practice is common, there’s still a common belief that family is the very first place to search for help. No wonder that just 30% of Americans go into debt by referring to private lenders. Asking a loved one for money can be difficult, but it’s a good option to apply for when times are tough.
40% of Americans lent in 2021
Among those who lent money, about 40% did so for a friend and 30% lent to a family member. Giving out money to a loved one doesn’t usually come with a proper financial agreement. This means that lenders aren’t promised to get a full sum of money back. In fact, almost 28% regret lending the money to the people they know because they fail to get their money back. This nuance shouldn’t be ignored by both parties to not face unpleasant circumstances in the future.
While it’s a good gesture to help a loved one who’s struggling financially, it’s still crucial to consider the effects it will have on your own financial well-being. Every lender should do everything to not dig himself into a hole while trying to support the other person. Financial help should hurt none of the parties involved in the verbal lending agreement.
Knowing the Terms Before You Take Out or Give Out Money
Don’t make conclusions when giving out and taking out money. It’s crucial to be clear with your expectations from the very beginning. Even if a conversation doesn’t seem comfortable, it must take place. It will make things easier by eliminating potential complications.
Keeping both sides satisfied is the key to success. Don’t be afraid to discuss everything in detail when discussing different nuances of the agreement. The most significant thing is that everyone involved knows all the nuances in advance. It is highly recommended to check everything well in order to avoid potential surprises down the line.