Payday loans can be beneficial 'in some cases'

Payday loans can be useful in some instances and in case of emergency, it has been claimed.

Liz Dunscombe, director of partnership development at Credit Action, said that payday loans can be beneficial due to their fast nature and can sometimes be cheaper than an unauthorised overdraft.

"If you have an emergency and you just have to have the money [immediately] it can help people out. The downside is the ease with which they can be obtained [means] that people do tend to use them perhaps for not emergencies and then they can't really afford to pay them back," she explained.

Recently, the Consumer Credit Counselling Service CCCS has warned that there is a looming debt crisis for young people in Northern Ireland.

People who contacted the charity in the country in 2010 owed an average of 8,272 in unsecured debts, significantly higher than the UK average for under-25s of £6,316.

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2011-08-19 12:40:47 © Moneyextra.com