Campaigners are urging the government to prevent lenders charging interest rates of up to 200% on unsecured loans.
The call comes as the Department of Trade and Industry closes its consultation on extortionate credit.
The church-based network Debt on Our Doorstep says interest rates must be capped to ensure low-income families do not pay unduly high interest rates.
Sky-high rates are most common in small, short-term loans, to families on low incomes who need the money but are turned away by mainstream lenders.
They will typically borrow £100 from a door-to-door lender, paying back a little every week for six months.
They end up paying £140, an interest rate of well over 100%, or 10 times as much as on a typical credit card.
Market forces
The lenders, such as Provident Financial, say their interest rates are higher because of their costs.
They have to employ someone to collect the money each week, instead of using an automatic direct debit.
And they let borrowers miss payments without penalty.
So far, the government has resisted capping interest rates but Debt on our Doorstep says market forces alone are not working.
The call comes as the Department of Trade and Industry closes its consultation on extortionate credit.
The church-based network Debt on Our Doorstep says interest rates must be capped to ensure low-income families do not pay unduly high interest rates.
Sky-high rates are most common in small, short-term loans, to families on low incomes who need the money but are turned away by mainstream lenders.
They will typically borrow £100 from a door-to-door lender, paying back a little every week for six months.
They end up paying £140, an interest rate of well over 100%, or 10 times as much as on a typical credit card.
Market forces
The lenders, such as Provident Financial, say their interest rates are higher because of their costs.
They have to employ someone to collect the money each week, instead of using an automatic direct debit.
And they let borrowers miss payments without penalty.
So far, the government has resisted capping interest rates but Debt on our Doorstep says market forces alone are not working.
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