Pay day loans 'can leave borrowers in a tricky situation'

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Pay day loans 'can leave borrowers in a tricky situation'

Individuals taking out pay day loans on a regular basis could see themselves getting deeper and deeper into debt as a result, it has been argued.

Una Farrell, a spokeswoman at the Consumer Credit Counselling Service, said the latest trend the organisation is witnessing is people coming for advice who have multiple pay day loans and this is having a severely detrimental impact on their ability to make ends meet each month.

She commented: "Interest and charges could increase pretty rapidly and they could find themselves in a very difficult situation."

Ms Farrell added that these people are probably on a low income to start with, so taking out these high-interest, short-term loans is often a considerable drain on their finances.

According to financial education charity Credit Action, the average household debt in the UK this month (including mortgages) stands at £55,822.

However, banks and building societies are being forced to write off loans totalling £22.54 million every day as Brits struggle to make repayments.

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