Research shows 1.2m taking out payday loan each year

According to research by watchdog Consumer Focus, the number of people under a payday loan has quadrupled in the last 4 years.

The consumer group said 1.2 million people are now in the process a payday loan every year - more than 1 billion pounds borrowing.

Payday loans are becoming increasingly popular and are seen as attractive - especially for those who find it difficult to have to fund.

However, it is recommended that this type of loan is best reserved as a product of last resort, as loan interest rates may not be compared to high street competitive prices are offered.

If the money paid back immediately to the next payday, this type of loan can be cheaper than paying an unauthorized overdraft or a credit card.

However, if the loans are rolled over, the debt can rise quickly strong.

Loan fees for this type of loan, on average, between £ 13 and £ 18 for every 100 pounds of interest on loan, but they can rise or high as 30 pounds per 100 pounds sterling for some online vendors.

Some companies, however, the interest charges of more than 2,500% per year, and, as a result, the watchdog is pressing the industry to bring more protection to vulnerable borrowers.

Sarah Brooks, Head of Financial Services, Consumer Focus, said: "Payday loans are a valid form of loan and it is much better for people to take one to go instead to a loanshark.

"But we think it must take a limit to the number of loans people and how many loans they will be able to roll," she said.