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The amount of people that have decided to look to payday loans as a means of financial help is on the rise. Figures have soared during the past month alone, as consumers struggle with rising day to day costs.

Financial website moneysupermarket.com said that there had also been a 58 per cent increase in demand for the loans since the May Day Bank Holiday, compared with the same period in April.

However, even though the popularity of the quick fix loan is growing, the group urged people to make sure it is the right path to go down for them before making any rash decisions. It also warned people to remember that interest rates can differ because of the varying amounts of money on offer and the time that it is borrowed for and the length of time needed to pay it back.

The short term nature of payday loans is designed to allow the borrower access to emergency funds in order to avoid defaulting on bill payments.

It is thought on average someone who borrows £100 should expect to pay back around £125 within thirty one days.

Applying for a payday loan is much easier than applying for a loan through traditional avenues such as the banks and this is one of the reasons that figures are soaring.

Head of loans and debt at moneysupermarket.com, Tim Moss, said: It’s no surprise to see the demand for payday loans rise so sharply in the current climate.

“These products act as a barometer, giving a unique insight into the state of the nation’s finances.”

The group also said that the strong demand for quick loans is because of the major advantages of getting hold of small amounts of money quickly. The process enables people to borrow small sums, often less than £100 for short periods to tide them over until they next get paid.

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