If you lend money to a family member, chances are you’ll never see it again. Close family is often the easiest resource that people turn to when they need to borrow large loans, but on average, across all generations, only about 57 percent of money loaned to relatives is ever paid back. That’s according to a recent survey by LendingTree, which found that adults only get back an average of $2,857 out of $5,022 that they lend relatives. Surveying more than 1,000 people across the country, LendingTree’s report shows that while borrowing money from family is common among almost 71 percent of Americans, repayment is hardly guaranteed.
That low guarantee can have serious consequences by putting awkward strain on family relationships. The Lending Tree survey found that more than one in four people who’d loaned or accepted money from family felt that it produced negative effects between them, including resentment, verbal arguments, and even “irreparable harm to the relationship.” More than one in four Americans who’d loaned money to relatives also said they regretted it and would never do it again. Yeesh.
The most commonly strained relationship? That with Mom and Dad, who two out of three women and more than three out of four men said were the figures they would most likely turn to when extra cash was needed. It seems, though, on the whole, millennials can rest easier about causing tense Thanksgiving get-togethers. Millennials tend to borrow the least out of Baby Boomers and Gen X-ers. Generation X, on the other hand, borrows the most, but also tends to repay the most amount back out of their family loans.
This data really shouldn’t suggest that lending money to family isn’t worth it, though. LendingTree’s business model is based around providing personal loans, so they have an interest in positioning themselves as a better alternative than your parents. But while borrowing from relatives may often cause strain, the survey data suggests that most Americans felt fine about having given loans to family. And in the face of financial troubles, being able to pay your rent on time is probably worth that awkward phone call.