The average Australian borrows about $200 a month, a new study released by Commonwealth Bank on Monday said. That amounts to a national personal debt level of $1.6 billion borrowed from family, friends and colleagues.

That amount of borrowing is just to tide Aussies over until the next payday. It excludes debts owed to banks for home mortgages, credit card companies and other financial institutions.

According to the survey of about 2,000 people, 25 per cent borrowed the bridge money from people close to them.

"Family and friends tend to lend each other in circumstances where emotional ties override commercial considerations.... They often don't objectively assess or even understand the risk," The Herald Sun quoted Slater and Gordon lawyer Rod Crunch.

The tendency to borrow was higher among city residents than those who live in the rural areas. It was also more common among the youth, particularly those in the age bracket 18 to 24, whose total monthly personal debts reached $240 million.

The trend is more marked among females than males, and the first people they would seek personal loans of $50 are their mothers. The study discovered that the average person borrows from their mums 1.72 times a year.

Women, particularly those who are not employed and as a consequence lack confidence to seek loans from banks, often resort to informal sources of borrowing to fund their immediate cash needs.

Due to these personal debts, 20 per cent of the survey respondents admitted friendships were lost over money matters.

That is because the closeness of the parties involved often results in failure to make a formal document of the loan terms which could lead to confusion over repayment time, interest, consequences of unpaid debt, or death of the borrower.

The disagreements could be as little as coffee change to larger amounts of up to $20,000 used for car repairs and house deposits.

Borrowing and lending money was facilitated with the use of technology, such as Internet banking, smartphones and other swifter ways of moving money.

To address Aussies need for short-term personal loans to tide them over until the next payday, Commonwealth Bank launched a new app named Kaching which allows customers to transfer payments to their peers and friends. The money transfer could be done through an email address, phone number or Facebook account with the use of a unique code generated by the app, which would allow the borrower to access their payment online from the bank, said Commonwealth bank Executive General Manager of Cards, Payments and Retail Strategy David Lindberg.

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