The Consumer Finance Association has spoken of the worries regarding the payday loan caps.

If payday lenders are forced out of the market, where will people turn in a financial crisis?

Banks tend not to loan short term credit, and getting a loan with them can be a gruelling process. With strong regulations coming into play, getting a mortgage can be tricky, let alone a loan needed to cover short term bills.

Justin Welby, the Archbishop of Canterbury, was quick to speak out against payday lenders and suggested credit unions should be used instead, initiating what was termed the 'war on Wonga’. However, no major credit union surfaced that could challenge people's reliance on payday lenders.

Despite Welby’s views on payday loans, the main force that the short term lenders have had to contend with is that of the Financial Conduct Authority.

With no alternative to turn to, the Consumer Finance Association (CFA) worries that people will have nowhere to get short term credit from, and breach their overdrafts with their banks, which can have incredibly high fines and interests that rival payday loans. The CFA have claimed that only a quarter of the people turned down by the new regulations of the payday loan sector actually end up better off financially.

For now, payday lenders are still around, and until we have a decent alternative, there will still be people who want them to stay.

However, even more worrying, is that it is also the bookie capital.

The temptation of quick cash, right next to gambling shops could be making life even more difficult for vulnerable people already in difficult financial situations.

Those with an addiction to gambling could well find themselves in a horrifying debt spiral, if they turn to gambling to try and pay off their payday bet.

Glasgow has a reputation for having very poverty-stricken areas, and the life expectancy of a person born there can change by up to 15 years, just by living a few miles in different directions. This indicates that people are more likely to be desperate enough to turn to payday loans in the city, despite not having a sufficient income to pay off the debt.

This year has seen the rise of both the fixed odds betting terminals (FOBTs) as well as an opposition to them. They have been described as the 'crack cocaine' of betting machines, and let people bet consecutive sums of money very quickly, potentially losing thousands of pounds with ease.

When mixed with payday lenders, this could cause havoc on a person's life that is addicted to gambling and these machines.

Payday lenders can be used effectively by people in a stable financial position, who just need a little extra to see them through one tough month, but they can be disastrous for those who have no secure way to pay them back, or use them for gambling purposes.

Unlike payday loans, logbook loans are secured, meaning they can repossess your car if you fail to make repayments.

Payday loans seem to be becoming less available, with the regulations on the industry shutting out a lot of the companies and causing them to shut down. Logbook loans in the meantime are fixing the demand and supply gap for short term credit.

The temptation of logbook loans is that they don't take bad credit into account. They don't need to assess the risk of lending to you, because if your loan is not repaid, they get your car.

It is rare that they will loan out the full 100% value of the car, and so they make a profit on repossessing the vehicle. For example, if your car is worth £10,000 and they lend you 70% of the cars value, which is £7,000, failure to make the payments will result in the car being taken and being sold for £10,000, the full value of the car.

However, they do limit the amount they will lend out, so it is rare that they would lend this much.

They don't have the threat of the 'spiral of debt' that payday lenders such as Wonga are notorious for, but they can still leave people hugely out of pocket, as suddenly not having access to a vehicle can harm employment by preventing people being able to drive to work. These loans also don't seem as risky, because they generally have a much lower APR than the infamously high payday lenders' APR.

With payday lenders going out of business, we could see more people turning to logbook loans and securing their vehicles against short term credit. This could cause even more havoc for people in a financially unstable position.

This is good news for 330,000 Wonga customers. However these customers are still in the dark about if they are included in this number. The criteria are those customers who fell more than 30 days behind with repayments and they should never have been lent to in the first place. A further 45,000 who are up to 30 days in arrears will have their interest charges dropped too.

The Financial Conduct Authority (FCA), who forced through these debt waivers in the first place, have said that customers need to be contacted.

The lender said it would contact all one million of its customers, to let them know where they stand with the lender and whether they qualified for the waiver, but so far has reportedly only contacted 375,000 people.

The issue arose when the FCA investigated whether Wonga really were running the checks that they claimed they were to ensure customer could afford repayments. It was found, as campaigners against payday lenders said, that the checks were insufficient, and people were being irresponsibly lent to.

Furthermore, the lending check system it used has had to be scrapped and they are working on another system to check the financial stability of future borrowers, which is being heavily scrutinised by the FCA.

The future of companies like Wonga are somewhat clouded. With the heavy regulation and caps that have and will come into play, the old payday lenders are not going to be able to do business like they used to. It is possible they will have to become more long-term, private lenders, or they could simply go out of business altogether.

The chair of the CMA's Payday Lending investigation group, Simon Polito, said "Greater price competition will make a real difference to the 1.8 million payday customers in the UK... At the moment there is little transparency on the cost of loans and partly as a result, borrowers don't generally shop around and competition on price is weak."

However, it is thought that up to 90% of all payday lenders could close down when the cap on interest rates and amounts repayable come into play, which will be enforced by the Financial Conduct Authority (FCA). If this is the case, there will be even less competition to choose between.

It is feared that should payday lenders completely collapse out of the market, people will have nowhere to get extra credit from, as payday loans are often seen as cheaper than the rates that the banks charge for unplanned overdrafts.

Without the payday alternative, morally ambiguous as it may be, people could become more strapped for cash and potentially even turn to illegal methods of acquiring cash, bringing back loan sharks.

The company has suffered a lot bad press this year, the height of which was the revelation that they had sent out thousands of letters to customers impersonating a range of non-existent law firms in order to scare those customers into repaying their debts.

However, in a more positive move, Wonga will be writing off the debts of 330,000 customers, totalling approximately £220 million.

Payday loan companies are now known for the 'spiral of debt' that their customers were likely to get trapped in, but action by the Financial Conduct Authority (FCA) and pressure from the public and other factions have curtailed payday lenders' inappropriate business practices over the last year.

In light of this, and likely as a result of wanting to be seen complying with the new regulations, Wonga have implemented new credit checks, and will forgive the debt of people who are already indebted, but would not have been if the new checks were implemented earlier.

In addition to these 330,000, a further 45,000 people are said not have to pay interest on their loans.

Despite having a fairly shady past, payday lenders can be used to help people out of a sticky situation, tiding them over until their next payday, but without proper credit checks, the infamously high APR the majority of them charge can lead to extensive debts. This however, may now become avoidable due to the new regulations.

Pre-tax profits had dropped from £84.5 million in 2012 to £39.7 million in 2013.

One of the major reasons for this huge slump in profits is because of the controversy in which the lender sent out letters to its customers pretending to be different law firms in order to scare them into repaying.

This scandal cost the company £18.8 million in compensation and costs.

The huge decline in profits has also been said by the company to be because of investment in staff and infrastructure of the business, as well as international expansion.

In an effort to comply with all the regulations that the Financial Conduct Authority (FCA) have levelled at the payday lending sector, Wonga has tried to become a more sustainable business. It is thought, however, that this is likely to lead Wonga away from the giant status it has, and cause it to become a smaller business and less profitable for the foreseeable future.

With tighter regulation affecting the way the company does business and the advertisements it uses, it will be interesting to see how Wonga's profits have been affected for this year.

Many adverts from payday lenders have already been banned this year, but there is a rising movement for a blanket ban on them all.

74% of 1,065 mothers and fathers supposedly said that they would be in favour of payday lending adverts banned from the TV and the radio before the 9pm watershed.

Similarly, it has been reported that the Citizens Advice Bureau (CAB) have been urging the Financial Conduct Authority (FCA) to put a "health warning" on payday loan adverts and make sure that they do not target children.

Wonga, arguably the most recognisable of the large payday lending companies, used jovial puppets to advertise them. However, these have been criticised in the past as a result of them appealing to children.

The worry is that if payday loans are normalised in the eyes of children by advertisements that appeal to them, they will grow up to become open to them as an option, and be more likely to get into financial trouble as a result of borrowing from them.

"We want TV viewers to take a stand against the payday loan industry by reporting irresponsible or misleading advertising. The FCA needs to introduce a clear and concise health warning on payday loan marketing which spells out the consequences of taking out a payday loan and to stop payday lenders targeting children," the chief executive of the CAB, Gillian Guy, is reported to have said.

Michelle Carter, 38, reportedly racked up a debt of £7,000 with seven different lending companies, and was trapped in the 'spiral of debt' that payday lenders have become infamous for.

Carter, who worked at the Argos store in Hull city centre, began giving refunds to fake customers and pocketing the money when she cashed up at the end of the day.

She was caught out when a fellow staff member discovered missing items that were on record, and she was arrested by police in July, confessing everything to the officers.

Ms. Carter was described as a "trusted and valued" employee, and apparently "she felt ashamed and she apologised", according to James Byatt who was prosecuting. She went on to plead guilty to her crimes.

These reports build an image of a trusted employee, who was trapped by a spiral of debt and felt the only way she could cope was to break the law, and this shows just how bad a situation some people can find themselves in after getting involved with payday lenders.

Ms Carter received an order to do 100 hours of unpaid community service and to pay compensation to Argos. Unfortunately, she has lost her job as a result, something that can only exacerbate her financial situation.

If you are in financial trouble, contact the Citizens Advice Bureau or the charity StepChange for advice on how to deal with your situation.

The clients that StepChange work with in the UK have an average debt of £15,300. In just Northern Ireland however, the charity said they helped 1,981 locals facing average unsecured debt of £18,360 in the 6 months to August.

The charity say that the kind of debts that people accumulate in the country have "gradually, but significantly changed."

The rise of payday lenders made a big impact across the UK, and now a growing number of people are in debt to them.

Payday loans accounted for just 4% of the cases that StepChange dealt with in 2010, but this number rose to 23% in the first six months of this year.

The amount owed by many people exceeds their monthly income, which indicates the extent of the "spiral of debt" that they are in.

It was suggested that one of the reasons for this rise was because of the stricter lending criteria the banks brought in to reduce risky lending.

StepChange Chief Executive, Mike O'Connor, said: "The Financial Conduct Authority's intention to cap the total cost of credit at 100% of the amount borrowed, and to limit the amount of times a loan can be rolled over, is a step forward, but we need to see further action from the regulator to fix deep-rooted problems."

If you are one of those struggling with debt, you can seek free, impartial advice from the StepChange charity.