EAST Lancashire Euro-MP Paul Nuttall has warned the desperately cash-strapped to be think twice before taking out a pay day loan.

A report by insolvency trade body R3 has just revealed that potentially five million British adults will be tempted to take out a short-term loan over the next six months.

UK Independence Party MEP for the North-West Mr Nuttall said: “They may be short-term but they are high cost and can result in alarming interest rates of more than 1,500 per cent.

“If people are considering taking such a loan I earnestly urge them to read the small print very carefully first and not make a hasty decision.

“These loans snare people into cycles of debt and however desperate they are now, their situation will only worsen with more debts they cannot pay.

“If you can’t pay back the loan on the due date the lender may then ‘roll over’ the loan for another month and you’ll have to pay another 30 days’ interest on the loan, plus the interest that’s already built up on it.

“It may be legal, but is morally corrupt and just legal loan sharking.”