The rise in the number of payday loans being taken out by households in the UK is proof of the problems caused by the credit crunch and highlight "unsustainable" levels of personal debt in the UK, it has been claimed.
According to research by the Moneysupermarket, commissioned by the Times, the number of payday loans taken out has risen by 130 per cent since last August.
Liberal Democrat MP Vince Cable said the trend is proof of the financial difficulties many people currently find themselves in as a result of the credit crunch and "the unsustainable levels of personal debt in the UK" according to the newspaper.
Chris Tapp, from debt charity Credit Action, echoed Mr Cable's view, saying more people with financial difficulties are turning to the loans, which can charge interest rates of up to 1,335 per cent.
"The growth of people who have problems who have such a loan has been notable in the last six months," he said.
According to Tim Moss from moneysupermarket, these loans are unsuitable for those looking to clear debts.
Source: http://www.debtmanagementtoday.co.uk/newsstory?
id=18658616&type=newsfeed&title=payday_loans_highlight_debt_problems_