If you kept on finding yourself short of money each month, it was always best to talk to your high street bank. Not anymore. The credit crunch has restricted ordinary people's access to traditional lenders. Overdraft extensions, credit cards, personal loans; many are off limits to the masses. Rising living costs, the reluctance of banks to lend money and the continued demand for credit, has given rise to a new breed of lender: payday loans companies.

Quite simply, it's a small short-term cash advance on your wages or salary designed to cover your expenses till payday. These loans usually involve borrowing £50 - £750 - and getting the cash in your pocket within hours. A lender will advance money against your bank details and automatically recover it when your next payday arrives.

Payday Loans great strength is that they give those people the banks have turned their backs on, the chance to get credit once more. They're also one of the quickest ways to borrow money. That's why UK payday loan applications have risen 55% this year alone. And why nearly 10million borrowers in the USA have been benefiting from easy pay day loans for decades.

UK pay day loans companies freely admit there are less expensive ways to borrow money. Even cheap loans have high Annual Percentage Rates (APR). However, we're talking about a short-term loan here - so an APR doesn't give the clearest of indications how much payday money really costs. A far simpler way to work out the charge is thus: borrow £100 with a UK payday loan company and you'll repay around £125. And this compares favourably with many credit cards - and is certainly cheaper than exceeding an overdraft limit.

Of course, this has its benefits and its pitfalls. That's why lenders make the true cost of borrowing clear at application stage. Just as they clearly assess a borrower's ability to repay. That's why the British Cheque Cashers' Association receives next to no complaints from the public about payday loans.