Government says loans will help people trapped in debt caused by payday lenders

The government is to explore the idea of zero-interest loans to help the millions of people trapped in a cycle of problem debt caused by borrowing from high-cost providers such as payday lenders.

Campaigners welcomed the development, which will be unveiled by the chancellor, Philip Hammond, in the budget on Monday, but they called on the government to go further to protect low-income households from exploitative lending practices.

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