Payday loans are common in low income areas

Families with low incomes are regularly using payday loans in order to help with finances on a weekly basis, according to the Debt Advice Foundation.

David Rodger, managing director of the money charity, said that many low income families who struggle to make ends meet have found it very difficult to borrow money on the high street since the recession began.

"The main concern right now is that low income households are easing their financial burdens by accessing short-term credit such as payday and doorstep loans, which are particularly prevalent in low income areas," he said.

Mr Rodger warned that often borrowing in the form of payday loans only defers the inevitable and increases the amount owed through the high rates of interest.

He said that those who are struggling with unsecured debt need financial advice to avoid them becoming stuck in a downward spiral as they may be entitled to a number of benefits.

Recently, the Consumer Credit Counselling Service claimed it was concerned about the amount of unsecured debts held by low income families.

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2011-07-29 13:02:15 © Moneyextra.com