Parents 'helping offspring to secure cheap loans'
As banks tighten their lending criteria and credit becomes harder to obtain, parents are helping their offspring to secure cheap loans by acting as guarantors.
This is the conclusion of a new survey by moneysupermarket.com, which revealed that 23 per cent of twenty-somethings have used their parents as guarantors when applying for personal loans and even mortgages.Tim Moss, head of loans at the price comparison site, said younger people are especially vulnerable to the credit crunch as they are less likely to own their own home and more likely to have missed payments on credit cards, making them more of a credit risk.
However, he insisted that twenty-somethings can overcome this by ensuring they are as credit-worthy as possible, giving them more chance of being accepted for cheap loans.
Recent research from GE Money Home Lending revealed that one in 20 Brits have had their initial loan or mortgage application turned down in the last 18 months.
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