Payday loans have recently come under fire for charging interest rates of more than 3000% but an investigation has revealed that unauthorised bank overdrafts carry even higher charges.

The UK’s part-nationalised banks can be more expensive than going to a payday loan company, who charge high interest rates for short-period loans.

Lloyds TSB, which received support from the government through the recession, would charge £216.32 interest on a customer’s current account if they were overdrawn by £150 for 10 days.

Halifax, which is also part of Lloyds, will charge a £50 fee on the same amount. Alliance and Leicester customers would also be charged a £50 fee on their Premier Direct account.

Payday loan company speed e-loans charges a massive 3,142% yearly interest but it would be cheaper to borrow £150 from them for 10 days rather than going to the bank, with charges of just £20.44.

Chris Tapp, director at Credit Action, said: “If people could actually see just how much they cost, it would give them much more incentive to stick within their budget. The way the charges are levied can lead people into a spiral of debt, as they get charges on charges. And these are not fringe lenders; these are the High Street names, some of which we own.”

Borrowing via unauthorised overdrafts, where a customer does not have permission to borrow can be a costly mistake and could lead to further debt problems due to the unexpected fees.

In comparison to the state owned banks, there are some more reasonable charges on the High Street. HSBC charges only 75p if the customer has not been overdrawn in a six-month period. Nationwide would charge £20.78 for going £150 overdrawn over 10 days and Santander would charge £51.06.