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A new survey suggests that for Americans, telling families that we need a loan is just about the last thing we want to do. That choice (at 8%) trailed far behind the favored options — credit card debt (34%), a bank loan (21%) or a payday loan (19%). The study, conducted by coupon website Vouchercloud, involved 2,437 American adults.

Seventy-nine percent said that they had, at some point, “needed to borrow a sum of money over $100” (excluding mortgage and education loans). Pride was cited as one of the big reasons asking family was seen as a last resort. It’s easy to imagine a sense of independence and not wanting to burden family members; it’s one thing to ask to borrow the car keys when you’re in high school and quite another to go to a parent when you need to finance a vehicle as an adult.

Still, Americans were more than twice as likely to prefer dealing with a payday lender to telling friends and family they need money. A payday lender is less likely to offer flexible terms and reasonable (or no) interest than a friend or relative. Plus, if you don’t make payments on a payday loan, it could be sent to a debt collector and leave a negative mark on your credit report.

Borrowing from family and friends can be difficult, since you often don’t want to complicate a positive, valuable relationship. Here are a few tips on how to lay ground rules that can protect both the borrower and the lender when you’re getting a loan from a close friend or family member. It may seem more formal and awkward to discuss this beforehand, but it can be important to establish rules before money changes hands.

Payday loans are appealing to many because they don’t require a credit check. However, if you’re going to borrow money using a credit card or bank loan, the terms will almost certainly depend on what kind of credit score you have. In general, people with the highest scores get the lowest interest rates. So it’s a good idea to know how lenders are going to see you when you apply for credit. (It’s a good idea anyway; monitoring your credit can tip you off to fraud, among other things.) You can get your credit report for free once a year from each of the three major credit bureaus, and you can get two free credit scores each month — with an explanation of why they are what they are — from Credit.com.

That way, if you need to borrow money (emergencies happen), the option is available to you.

More on Managing Debt:

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  • heavyw8t

    This article just reinforces the disdain I have for those predatory loan places. I have always, and will always, failed to see how you fix debt with more debt, particularly when the new debt is schemed in a way that you will pay back three times the amount you borrowed. DO NOT go to those places. In fact, work for the cause to get them shut down.

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