People who rely on payday loans on a regular basis could have a more serious debt problem, according to an industry commentator.
Beccy Boden Wilks, spokesperson for National Debtline, warned that taking on such debt could be “symptomatic of a serious underlying debt problem”.
She explained that relying on such short-term, high-interest loans could mean the person is over-committed financially and struggling to become debt free.
People who need to use this form of debt are being advised to look at their budget and debt management plans and see why they have to rely on such loans, the spokesperson suggested.
Warning against the spiral of debt, Ms Boden Wilks said: “If you’re paying it back the following month, you’re basically spending your wages before you’ve got them. And the cycle carries on.”
Since September last year, short-term payday loans have seen uptake increase by some 55.4 per cent, according to research by moneysupermarket.com.