Have you ever lent money to a member of the family or a close friend? According to Investors Group, two thirds of Canadians have loaned or borrowed more than $500 this way, and it often ends badly. A poll conducted for the company found that many of the lenders felt pressured to make loans, and more than a quarter of them didn’t get all their money back.For some borrowers, family and friends were the only option. Others went this route because of easy terms, such as no interest charges and extended repayment schedules.
Many of the loans were for financial emergencies. Other top reasons include an expensive purchase, education, and a down payment for a home.
Most of the loans were made without signing documents, but Investors Group says putting the deal in writing is a good idea, and should encourage borrowers to take their obligations more seriously.