Family and bank loan comparison
Borrowing From Family vs a Bank Loan in the UK (2026)
Compare borrowing from family with a bank loan in the United Kingdom. Explore the comparison tool and talk through the terms before you decide.
Explore the comparisonExplore the family and bank loan comparison
The tool below provides the comparison information from Chipkie’s shared data source. Read the displayed dates, sources and notes alongside the figures.
| Borrowing £10,000.00 over 24 months | Rate | Interest paid |
|---|---|---|
| From a bank | 9% | £964.34 |
| From family or friends, interest-free | 0% | £0.00 |
| Stays in the family | £964.34 |
Family loans can carry interest if you both want them to — this shows the interest-free case, which is what most people choose.
Bank rate: Bank of England quoted household rate, £10,000 personal loan — average UK personal-loan APR, Bank of England quoted rates (as at Q2 2026)
Illustration only, on a £10,000.00 loan repaid monthly over 24 months. What a bank offers depends on your circumstances, and what family or friends agree is entirely up to you. Chipkie documents loans people make to each other — it is not a lender and provides no credit.
Compare the whole arrangement
Look at the repayment schedule, any fees, flexibility and what happens if a payment is missed. Do not assume that one option is cheaper or more suitable for everyone.
Give both people room to decide
Talk through what each person is comfortable with. Write down the loan amount, repayment schedule and agreed terms, so you both know what to expect.
Discuss what you will do if circumstances change. A clear plan gives you a shared starting point for the conversation.
Keep your loan plans together
Plan your repayments · Browse all loan tools
This tool provides general information, not legal, tax or financial advice. For guidance on your own circumstances, speak with a qualified professional.