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Loan danger: 25% fall out with friends over money

THE LOVE OF MONEY: Family and friends are falling out over unpaid loans

ALMOST ONE in four of us have fallen out with friends over money issues and 42% have lent money to a friend only for it never to be returned, according to new research out today.

The study found that 74% of us have lent money over the past 12 months, with half of us lending up to £500 and nearly one in 20 (4%) having lent over £5,000.

The survey was conducted by Flender, a peer-to-peer lending platform that enables consumers to raise finance through friends, family and social network connections. It questioned Brits on our attitude’s to lending friends and family money and also found:

The UK social lending industry – loans between friends & family – is estimated to be worth over £2.9 billion a year

Most (95%) of us have never charged interest to anyone we know, but half would consider doing so and feel it is acceptable to charge interest to those that we personally know (47%).

Almost a quarter (24%) lent money because they felt that the person who asked was desperate - For 23% it was a case of honour, for example returning a previous favour.

There were also some obvious differences between the sexes in the research, with many more women having lent money in the past 12 months. Whilst 8% of blokes admit to lending money this year, that figure was 12% for women, who are also are more likely (46%) than men (41%) to pluck up the courage to borrow from friends and family. The most popular amount for men to borrow is £20, whilst for women that amount is £100.

In response to the growing social lending market, Flender has launched a service set to revolutionise the peer-to-peer lending industry. In development for two years, the revolutionary platform will provide a framework that will enable people to engage with their social and business connections meaning that rather than engaging with a bank or loan company, there is an added element of trust from personal connections.

Commenting on the launch of the campaign, Kristjan Koik, C-Founder & Managing Director of Flender said:

"The social lending market among friends, family and business connections has never been formalised, which is crazy when you consider that this is a market worth just under £3 billion a year.

"There are many arguments between friends and family over money and we believe our platform can make this a thing of the past.

"Asking people you know for money - and lending to them – is awkward and is certainly an unreliable means of finance. Whether it’s to grow your business, fund further study, or to fund home improvements, Flender will let you borrow from and lend reliably and easily via any device.”

Oli Cavanagh, Co-Founder and Sales Director of Flender adds:

”Using Flender is extremely user friendly.

"There’s no paperwork, and monthly payments at the preferred interest rate are all automated, meaning you never have to ask for your money back.

"Importantly Flender is also the first to bring in social connections in order to add a new element of trust and additional way of credit scoring in peer to peer finance.”

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