Debt-stressed households are being forced into taking crippling payday loans as banks crack down on credit Debt-stressed householders are being forced to taking crippling payday loans The crisis follows a year of financial woes, leading people to non-bank lenders Australia's household debt to income ratio is the highest in the developed worldBy Holly Hales For Daily Mail Australia Published: 04:10 GMT, 21 February 2019 | Updated: 04:12 GMT, 21 February 2019 Viewcomments Debt-stressed householders are being forced to take crippling payday loans amid plunging property prices and an industry-wide crackdown on credit. The crisis follows a year of property price plunges, bank crackdowns and stagnant wages growth forcing many Australians to turn to non-bank lenders to ease their financial woes. Australia's household debt level to income ratio is already the highest in the developed world. Experts are warning the situation is becoming increasingly dire for people struggling with financial problems, according to the ABC. Debt-stressed householders are being forced to take crippling payday loans amid plunging property prices and an industry-wide crackdown on credit 'The online tool, the app, that's a really important part of the story because a few years ago there was almost nobody offering apps for credit,' Digital Finance Analytics data scientist and banking analyst Martin North said. 'These days, a lot of people can actually get credit online, and once you've got into the online environment you've then got much more flexibility to flog other products, often without much visibility.' Home loan customers often have credit card limits of just $6,000 with an increasing number of customers using payday loans and deferred payment apps like Afterpay to make a series of small purchases. Former High Court judge Kenneth Hayne's banking royal commission has put more scrutiny on Australia's major lenders, who had already been more reluctant provide finance. For the past two years Australia's banks have been more reluctant to approve loans, after the Australian Credential Regulation Authority imposed stricter rules on investor and interest-only mortgages. The crisis follows a year of property price plunges, bank crackdowns and stagnant wages growth forcing many Australians to turn to non-bank lenders to ease their financial woes For single mother Belinda Fox, from Albany, Western Australia, it was a need to provide for her young son which inspired the decision to get a payday loan. The loan came after Ms Fox's Centrelink payments stopped when her son turned eight. The loan was approved within one day and the lender didn't ask to see any credit history. 'I want to be a good mum to my son and I pretty much didn't eat full meals, I made sure my son did and then I'd eat his scraps,' she told the ABC. However, after being hit with the unforeseen effects of the loan's high-interest nature, Ms Fox said the process when applying should be more transparent. 'Doing without for the short-term isn't as hard as doing without long-term, because every time I've had to make a repayment, I've had to go without,' she said. Home loan customers often have credit card limits of just $6,000 with an increasing number of customers using payday loans and deferred payment apps like Afterpay to make a series of small purchases 'The risks should be laid out a lot more. The interest shouldn't be so high perhaps for people who actually need a loan and intend on paying it. It seems a bit silly the repayments are so high.' Over three-million additional payday loans have been taken out by Australians in the past three years, Digital Finance Analytics with their cost totalling $1.85 billion. Additionally, Cash Converters, one of the country's largest non-bank providers, reported a 154.6 per cent increase in its medium amount loans over the past financial year. The spiraling figures following the release of the long-awaited Banking Royal Commission findings earlier this month. Seventy-six recommendations were made to combat a culture of greed and misconduct, with their implementation aiming to 'change (the banking sector) forever'. Read more: Share or comment on this article: All rights reserved for this news site dailymail and under his responsibility