Payday loans 'should be a last resort'

Payday loans should only be considered as a last resort after all other forms of borrowing, according to a consumer awareness organisation.

Jason Riddle, co-founder of Save Our Savers, suggested that some people may not be completely aware of the implications of using payday loans.

He admitted that in an ideal world everyone would have savings put aside in case of an emergency but that just is not always possible.

Indeed, summer holiday spending was found by moneysupermarket.com to have pushed one in five parents into debt.

"If there is no alternative then a payday loan might be the right option. They are quick and easy to obtain; but they are extremely expensive compared to other forms of borrowing so they should only be used as an absolute last resort," Mr Riddle said.

He added that in the long run it may be better to make savings, as although this is difficult it is no harder than finding the money to repay a payday loan.

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2011-08-03 13:05:36 © Moneyextra.com