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Consumers need to be aware of the risks associated with taking out any sort of loan, one expert has pointed out.

David Rodger, managing director at the Debt Advice Foundation, highlighted that the tightening of lending criteria means many people are hoping to borrow money.

"The real risk associated with payday loans, which often have high APRs [annual percentage rates], is getting into a cycle of borrowing that is difficult to break out of," he explained.

Mr Rodger emphasised that people from low income backgrounds often take out a loan when they have had a large financial shock, but then supplement their income by taking on more debt.

Research from the Finance & Leasing Association recently showed that during March, finance remained a popular option for people hoping to get their hands on a new car.

Improvements were seen since the previous month, which the group believes is partly due to the release of the new 11 registration plates.