The majority of consumers in the UK would be in favour of a cap on interest rates applied to
personal loans, a new study has indicated.
A recent report from Consumer Focus revealed that 1.2 million Brits are now taking out payday loans every year, which commonly come with an inflated level of interest.
Research commissioned by YouGov and carried out by Compass found that 68 per cent of borrowers believe they should be protected from excessive fees by the government.
Some 69 per cent also said the leadership should be responsible for promoting reputable lending, such as credit unions.
Compass general secretary Gavin Hayes said: "This is a key test of the coalition government's stated commitment to create a fairer society. Now we need to see if it backs the people or the financiers."
The report from Consumer Focus revealed that the number of people taking out payday loans has quadrupled during the last four years.
The Association of British Credit Unions has advised consumers to be wary of any unsecured loans which may seem like a good deal, but could charge up to 2,500 per cent interest per year.
