Almost half (45%) of all parents would be happy to act as a guarantor on a loan product for their grown up child, research from Amigo Loans has revealed.
A third (30%) were willing to do so to help their child reach a career/ business goal and half (53%) agreed that it’s a good way to help them to take responsibility for their own finances.
The research also found that 50% of parents believe it is a good way to help a child financially without them having to part with the money.
James Benamor, founder and CEO of Amigo Loans, said: “Every parent wants to do everything they can to help out their kids but dishing out the cash isn’t always the best way.
“It means they can’t build up their own credit history to stand on their own two feet, plus parents are left out of pocket.
“Many people going into their 30s still have a very low credit score so can’t access financial products they need, whether it’s to buy a house or start their own business.
“We see so many young people resorting to extortionate payday loans when they are turned down for bank borrowing or a credit card because they are simply unaware of the alternatives available.
“We find parents are more than happy to provide support but want to stop the handouts – and their children want to stand on their own two feet.”
Amigo Loans calculate interest daily, charge no fees for early or late repayment and can work out thousands of pounds cheaper than regularly using payday lenders. Interest rate is 49.9%.