Parents forced to guarantee offspring''s borrowing

By MoneyhighStreet Staff. Published on September 17, 2008 This post currently has no comments.

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Parents are increasingly being forced to guarantee loans taken out by their offspring, a new study has revealed, as lenders impose ever tighter criteria in the face of the credit crunch.

Research conducted by price comparison site moneysupermarket.com found that 23 per cent of twenty-somethings had used their parents as a guarantor when applying for a loan.

Meanwhile, across all ages 11 per cent of people have relied on their parents as guarantors for a loan, the study found.

Tim Moss, head of loans at the company, said: "The tightening of lending criteria across the board has meant it''s becoming difficult to even get a credit card or a loan, never mind access the most competitive rate on a mortgage.

"Younger people are especially vulnerable in this climate - they tend not to own a home and are more likely to have missed the odd payment on a mobile phone or credit card."