A report suggests that people are now turning to short-term lenders such as The Money Shop and PaydayUK, as a result of as high street banks are rebuffing to slacken their grip on credit.

This new lending option, the ‘payday loans’, though, is an expensive option, they approve loans within minutes and also put forth check credit ratings.

These payday loan Companies do not offer long-term solutions to debt, instead are said to target people with unexpected bills. The market is said to have widened in the recent years in the U. K, with a strong presence online as well as advertisements on daytime television.

The payday loan has grown by as much as 40% last year and a 45% increase is being anticipated this year too. According to the report, almost a million people in the U. S have already borrowed £1.2bn in total from the payday loan.

The loans are aimed at people on lower incomes and are offered to people with bank accounts and jobs. It has been seen that such type of loans most of the times are taken by people with salary of less than £25,000.

Tim Moss, head of loans at Moneysupermarket. com, says “It’s not for people that have never been able to get credit”. Instead, it is for people who tend to have stretched out in the times of effortless credit.