Payday loans 'are ridiculously expensive'

Payday loans must only be used as a last resort, an expert has warned.

Short-term personal loans must only be used as a last resort due to their excessive interest rates, a financial expert has said.

In the wake of the global economic downturn, many Britons have found it impossible to make ends meet with just their current account balance and have therefore opted to take out payday loans to help with their outgoings.

However, Martin Bamford, chartered financial planner at Informed Choice, has warned such products are "ridiculously expensive", meaning they should only be considered when there is no alternative.

Mr Bamford urged people to "exhaust every other supply of money in the short-term", including asking to borrow from friends and family, before a payday loan.

"It has got to make sense within your budget and live within your means so you avoid it ever happening again," he added.

This comes after Ed Bowsher of Love Money said an emphasis on paying off debt is harming the UK economy.

By Joe Letts