It has been announced by the City regulator that a cap on the amount that payday lenders can charge their customers is being introduced.
Payday loan rates will be capped at 0.8% of the amount borrowed a day, said the Financial Conduct Authority (FCA).
In total, no one will have to pay back more than twice what they borrowed, and there will be a £15 cap on default charges.
The regulator has said the changes will come into force in January.
“For people who struggle to repay, we believe the new rules will put an end to spiraling payday debts,” said FCA chief executive Martin Wheatley.
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