A Bermuda firm is to offer payday loans.

Gold Standard — which already buys unwanted jewellery and offers secured loans — said the move was in response to customer demand.

Business co-owner Matthew Mello said that qualifying customers would be able to borrow up to $500 on a short-term basis, with repayment on a one, two or four week basis.

Mr Mello said: “As with our secured loans, payday loans are a quick short-term solution to get cash for an unexpected expense, such as a repair or medical bill.”

He added: “We have been offering secured loans for the past two years and their duration is typically one to three months, but we’ve had a core of those customers who complete the loans within a much shorter time — using it as a bridge to their next pay period.

“There have also been prospective customers who haven’t had the appropriate collateral but who were gainfully employed and in all other ways capable of repaying a small loan.

“Those situations prompted us to look into ways we could better serve those customers and payday loans were the most versatile solution.”

The new loans scheme will be launched on Monday.

Mr Mello said that payday loans will require a more detailed application process — but that application forms had been made as simple as possible.

He added: “With a secured loan, the amount of the loan is predicated on the value of the item or items used as collateral, while a payday loan is based on borrowers’ established income level.

“With proof of income, an ID and debit card, we anticipate being able to make lending decisions quickly so that qualifying customers will be able to walk out with cash on the spot.”

And he warned that the repayment schedule for a payday loan was “more rigid” than that for a secured loan.

Mr Mello said: “With our secured loans, we’re able to extend a great deal of latitude with the payment schedule provided the minimum service charges are kept up to date.

“With payday loans, the loan and associated fees are fully repaid by a predetermined date by an automatic debit card charge that has been pre-approved by the customer.

“Everything is outlined and agreed in advance, so there are no surprises.”

He added: “As Bermudians look for ways to meet their financial obligations, Gold Standard is continually expanding its services to offer customers the chance to get the cash they need when they need it.”

Payday loan firms have boomed in the UK in recent years — but they have come under fire for high rates of interest and some of their business methods.

Wonga — one of the biggest payday loan firms — was last month forced to write off more than $348 million in loans to 375,000 borrowers after the new UK regulator the Financial Conduct Authority after the firm admitted it had failed to check if customers could afford the repayments.

Wonga — which has between 30 per cent and 40 per cent of the online payday loans market — has also been slammed for charging annualised interest rates of up to 5,853 per cent.