A poll of 2,000 UK adults by comparison site uSwitch.com found one in three borrowers would take a payday loan out again while more than half (51%) said the loans met short-term borrowing needs.

However, one in five (18%) said the loans made their troubles worse, three in ten (29%) regretted taking one out, and half (53%) said payday loan companies should be better regulated.

Some 45% said payday loan companies should be banned altogether.

Short-term lenders were criticised last month by the Archbishop of Canterbury, who said he wanted ‘to compete’ them out of business.

Michael Ossei, personal finance expert at uSwitch.com, said: “Make no bones about it – the way that many payday lenders are currently operating is unscrupulous, unprincipled and immoral. These modern day highwaymen have caused thousands of customers to become trapped in a downward debt spiral with no way out. This industry needs to be cleaned up – and quickly.

“But what is becoming clear is that, executed the right way, payday loans serve a purpose in helping many families bridge the gap between bill payment day and payday, at a time when living costs have risen 25% in five years. The need for short-term loans is escalating and those most in need of money, often with poor credit ratings, have been turned away from the banks and left to feel they have no other option.”