Borrowers needing as little as £100 could be charged up to £156 more by their bank than it would cost at a payday lender, it has been revealed.

Which? compared the cost of borrowing £100 for 30 days using an unauthorised bank overdraft.

It found some banks charge more than seven times the maximum £24 charge on a payday loan.

Customers who need £100 could end up paying as much as £180 in fees at their bank if they borrowed the money across two monthly billing periods, according to the findings.

Which? found that NatWest could charge £180 to borrow for 30 days over two billing periods – a difference of £156 compared with a payday loan costing £24.

Customers using Lloyds or Santander could be charged £160 to borrow across two billing periods, £136 more than a £24 payday loan, Which? found.

A My Financial Broker payday loan of £100 will cost the consumer £24 for a 30 day period. The benefit of a My Financial Broker short term loan is the customer is able to pay back early and save money on interest, as interest is applied on a daily basis. If a customer is unable to make their legally binding loan repayment due to a change in circumstances, My Financial Broker will freeze the customer’s interest and charges, and work with them to clear the balance in a manageable way.