PLANS to cap fees and interest paid by payday loan customers have been backed by a Bradford-based debt counselling charity.

Christians Against Poverty (CAP), which has its headquarters in Jubilee Mill, North Street, has welcomed the caps in a bid to stop debts spiralling out of control.

It says in its Bradford Central region, based at the Light Church, Jubilee Centre, Jermyn Street, Bradford, is fully booked up with consultations with people in debt from now until the end of March.

Meanwhile, the Bradford North West region, which operates from Bradford Family Church in Heaton, has 13 people booked in for use of its services, meaning it is almost fully booked until the end of March too.

The new rules which came into force today mean people using payday lenders and other short-term credit providers will generally see the cost of their borrowing fall.

Those who cannot afford to repay their debt on time will never pay back more in charges than the sum they initially wanted to borrow.

For all high-cost short-term credit loans, interest and fees must not exceed 0.8 per cent per day of the amount borrowed.

The Financial Conduct Authority (FCA), which oversees the industry, says the move will lower costs for most borrowers and ensure that charges are proportionate to the size and duration of the loan.

Default fees for borrowers who fail to repay on time will be capped at £15 under the measures, which are the latest in a string of clampdowns on the sector.

Someone who borrows £100 but struggles to repay their debt will never pay back more than £200, including fees and charges.

A national CAP survey found 20 per cent of its clients had used payday loans and the most common reason was for buying food.

John Kirkby, founder of Christians Against Poverty, said: "Demand at our two Bradford centres is very high.

“Very often people who have taken out payday loans have done so as a last resort.

"They know it’s a risky game but they are in desperate circumstances, as our survey suggests, and it’s easy cash.

"We welcome the new regulations brought in by the FCA which will mean people in difficult situation are less likely to spiral into abject poverty, as they have been doing.

“We expect to see the fallout from the booming payday loan industry years for some time to come.

"Interestingly, the FCA have suggested that the new regulations will result in hundreds of firms leaving the market and possibly no payday loan companies on the high street within a year."

Meanwhile, CAP is holding free money courses across the Bradford district to help people gain control of their finances.

The next course is at St Andrew's Methodist Church, Otley Road, Bradford on Monday, January 12, from 7pm.

For more information, go to capmoneycourse.org.