Based on a survey of 2,225 Americans, 44% of people who lend money to their friends or family members experience negative consequences. Namely, 38% lose their money, 23% harm their relationship, 14% damage their credit score, and 7% get into a physical fight.
While older generations are more likely to lend their money — i.e., 61% of Boomers lend their money to people in need, followed by Gen X (53%), Millennials (48%), and Gen Z (47%) — Millenials are more likely to get into trouble with loans.
In fact, the results of the survey show 62% of Millennials who lent money end up losing it. At the same time, 47% of Zoomers and 36% of Gen Xers experience the same, negative outcome.
When it comes to gender, men are more likely than women (48% vs. 40%) to get into financial trouble after helping their friends with loans.
Why do people lend money? The respondents claim they do it:
- Hoping it would be paid back (54%)
- Paid a group bill hoping it would be reimbursed (24%)
- To co-sign a loan (21%)
- Lent someone their credit card (19%)
On that note, 38% of respondents lost money due to lending it, 33% lost their cash due to paying a group bill, lending their credit card (21%), and co-signing (21%).
However, co-signing is probably the riskiest move, given that 21% of people who cosigned on a loan end up barehanded, on top of damaging their credit score.