Payday loans 'must be treated with caution'

Payday loans can be dangerous, an expert has said.

Payday loans should only be considered by individuals if they have absolutely no other options available to them in an emergency, a financial specialist has said.

Throughout the recession, these short-term personal loans have become increasingly popular with consumers struggling to make ends meet with their regular income due to the effect of factors such as high inflation and a rising cost of living.

However, while they undoubtedly offer an "easy option" for people in need of a monetary boost, Jason Riddle, co-founder of Save Our Savers, has insisted they need to be treated with caution because of their cost.

"They are extremely expensive compared to other forms of borrowing so they should only be used as an absolute last resort," he warned.

Recently, Justin Modray of Candid Money advised Britons to concentrate on paying off debts rather than storing money in savings accounts at present, but Mr Riddle suggested this may be tough for some.

By Joe Letts