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Loan charges: Debtors turning to friends and family for money

In a bid to avoid things such as loan charges, many debt-ridden people are turning to friends and family to borrow money.

According to research by the Consumer Credit Counselling Service (CCCS), almost a fifth of people have borrowed money from friends or family, with the average person owing £3,500 to said relative or friend.

Delroy Corinaldi, director of external affairs at the charity, said: "Many people turn to family members or friends for a loan when they are struggling to cope - especially where obtaining credit is difficult because of a poor credit history.

"However, borrowing in this way can place an enormous strain on friendships and family relationships, and should be considered very carefully."

The average CCCS client owed 22,467 in total unsecured debt and the average monthly repayment to the friend or family member was £124.

It is thought this sort of lending has increased because consumers are less able to access credit through traditional channels.

Charles Baker

Charles is a reputed financial analyst with decades of experience under his belt.

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