Payday loans may be fast and easy to obtain but before you sign on the dotted line it's not just the high interest rates that you need to consider.

Originally the form of lending known as "Payday Loans" originated in the USA and has now landed on the shores of the UK - spreading at an alarming rate.

Payday loans are short term credit loans that are repaid in full on the day that you receive your salary from your employer. Payday loans are really designed to get you out of a 'fix' when you find yourself short of money before payday but they do have an extremely high interest rate attached to them.

A typical example of this would be that you borrow £100 but repay £130 or £140!!

When you take into account that a Payday loan is a fairly short term form of lending, the interest rate is a great deal higher than other forms of lending.

Now it may just be that you find yourself in desperate need of a small loan and a Payday loan will fit your circumstances. What you will need to bear in mind is that if you are short of money one month and you borrow money in the form of a Payday loan then you will need to pay the original amount that you borrowed, plus the interest.

This may have a 'knock-on' effect of then leaving you short of money again. When faced with that situation you may be tempted to turn to the Payday Loan option again and this is where the hidden danger is waiting for you.

Let's say that you borrowed £200 one month and on your payday you paid back £260. This would leave a £260 hole in your wages which could temp you (or leave you no other option) but to use the Payday loan option again and borrow another £200.

This is the start of a vicious circle that many people find themselves trapped and the payday loan hidden trap will have snagged another victim.

Each month when you repay the £200 loan you are paying £260 out of your wages - this leaves a £260 hole in your wages - so you borrow £200 again to 'fill the hole'.

Then the process repeats itself again when you have to repay £260 on payday - you're trapped in the Payday loan circle of debt.

The loan company lend you £200 once - it's the same £200 the re-lend you each month - and for this pleasure you are paying them £60 each month when you repay the loan.

Over a 12 month period you will have paid the loan company £1,200 for basically borrowing one lot of £200.

It is a very harsh reality for many people who unfortunately have no other option and are unable to get out of the circle. If you are considering a payday loan then carefully think about what you are getting in to before borrowing any money.

If you have no other option and are 100% certain that you will have enough money to repay the loan without it affecting the next months finances then a payday loan could be your only option.

Otherwise don't fall into the payday loan trap. Try and get through or ask a friend to lend you some money - even if it isn't as much as a Payday loan company - it will be cheaper when it comes to paying it back.