Payday loans are short-term loans, designed to help the consumer until their next payday, but usually charge astronomical rates of interest.
The average loan is around £200, and most loans have to be repaid within 30 days. These loans are often available to everyone, including those with a poor credit history.
Interest rates of 2,000% are not unusual on this kind of loan, and these loans have been subject to an ongoing campaign to make advertisers clearly explain the massive costs involved.
Customers applying for payday loans can often have access to the money in their bank accounts in as little as two hours, which makes them all the more appealing, and borrowers don’t have to tell the loan company what they wish to borrow the money for.