Running out of money before your next pay day is a situation that a lot of workers can testify to.  But a concept called the ‘pay day loan’ could be the answer for many who need something to tide them over till the next day.

Pay day loans are cash advances that are offered by specialist loan companies.

"If you're short of cash at the end of the month and need emergency money to tide you over till payday, then they seem like a solution," says Sean Gardner, chief executive of price comparison site MoneyExpert.com. "Generally they allow you to borrow between £80 and £750 and they charge £25 for every £100 borrowed. If you take a loan of £500 you will repay £625, for instance."

Payday loans are popular and widely available in the US. Critics say that the loans have excessively high pay back rates and can in some cases leave borrowers in serious financial problems if unable to pay the loan back quickly. The pay day loans have also been blamed to adding to the housing and loans problems in the US.

With the difficulty of access to readily available loans for many in the UK especially young non homeowners, pay day loans could provide an answer for thousands of Brits who are tying to ensure they have enough money to last them through the month.

A spokesman for MEM, which runs Payday UK, adds that the company checks customers' creditworthiness to ensure they can meet the repayments, and that its loans are cheaper than the alternatives, which include "bouncing cheques or incurring unauthorised overdraft fees, both of which can work out considerably more expensive to the customer than the equivalent charges on a payday loan".

Meanwhile, Frances Walker of debt charity the Consumer Credit Counselling Service (CCCS) says her organisation is starting to see more and more clients who have taken out payday loans – mostly young, single people living in rented accommodation.

"The people who use payday advance lenders are those for whom all other options are severely limited," says Ms Walker. "They are less likely to have a partner's income to fall back on, or to be able to obtain a loan against property. Being younger, they are also less likely to have had an opportunity to build up a positive credit history, which will make it difficult for them to obtain standard credit cards or loans."