Desperation is forcing people to turn to payday loan companies to see them through until their next pay check.

But with the extortionate interest rates, many are finding themselves trapped in a vicious circle of borrowing from one loan company to pay off another.

A 27-year-old man from Hove, who asked not to be named, is struggling to pay off loan company Speedy Cash, which boasts loans of up to £1,000 with an annual interest rate of 1410.3% APR..

He said: “It’s a continuous cycle. You pay one off and then you have got to borrow to pay off the next.

“I have been paying three different companies off for about two years now and I still owe about £125. They are so expensive, the interest rates are ridiculous.

It’s all the Government’s fault though. I’m not working and I’m trying to find a job but there are no jobs out there and no help for people who can’t get a job.

“The Government is always saying ‘we will help you’ but where are they? Where is the help? What are we supposed to do?

“I will never use a payday loan again. Once this is paid off, that’s it. Never again.”

Yesterday, short-term loan providers, regulators, charities and government ministers held a conference to discuss ways to tackle problems within the £2 million industry.

It came just days after the industry was referred for an 18- month investigation by the Competition Commission to clamp down on bad practices.

Trouble

A 34-year-old Brighton man, who asked to remain anonymous, has turned to the help of payday loans to borrow £60 several times since he lost his job as a civil engineer several months ago.

He said: “I’ve been told that I will be entitled to £45 a week if my Job Seekers’ Allowance is approved, but out of that I’ve got to pay for food, accommodation, clothing, transport – everything.

“I’ve been living off my savings but it’s running out quickly.

“The trouble is sometimes when you are in debt you have just got to use the loans to pay some things off.

“The interest rates are incredibly high. It’s terrible. I’m lucky I haven’t had to take one out for a longer time yet, but it would be easy to get into trouble if you did.”