Payday lenders 'are loan sharks in disguise'

An expert has urged people to avoid payday loans.

Consumers have been urged to resist the temptation of taking out short-term personal loans in order to make ends meet in the present economic climate.

Following the recession, the popularity of payday loans has risen dramatically, as people are seeking to borrow money immediately due to issues such as high inflation, low interest rates and rising gas and electric bills.

However, Justin Modray of online resource Candid Money has warned individuals to be wary of such credit because payday lenders are "little more than loan sharks in disguise".

Mr Modray explained that the deals can work as an "absolute last resort" so long as the borrower repays their debt within a month, but warned lending beyond this is likely to "crucify" their finances.

Last week (August 12th), R3's Personal Debt Snapshot report showed that around half - 47 per cent - of all Britons are currently concerned about their monetary situation.

By Mark Hornby