LOW-INCOME Sunshine Coast families are being ensnared, taking out loans week-to-week just to make ends meet.
The loans cost $35 per $100 borrowed, meaning a $540 repayment is required for $400 taken over two weeks.
Paul Janus, of the St Vincent de Paul Landsborough, said while there were some people who got themselves into trouble through their own fault, most were genuine people who had made poor budgeting decisions or had been confronted by a minor financial crisis.
In some cases the need for $20 to get by until pay day saw people commit to a minimum $300 loan, the full interest and repayment of which ate into already tight household budgets.
The consequence can be a continuing cycle of loans that leaves the borrower ensnared.
Gerard Brody, the director of policy and campaigns at the Consumer Action Law Centre, said it was not unusual for individuals to have committed to a cycle of 10 to 20 loans each with upfront fees.
One client who finally went to the centre for help had taken out 64 separate loans over two years.
"Our argument is that a financial product is no solution to these problems," Mr Brody said.
But while the law centre and charities want legislation to make the two-week $300-$500 loans unviable because they were the most harmful to those on welfare or the minimum wage, Federal Finance Minister Bill Shorten (pictured) has said he is likely to recommend in line with a submission from Cash Converters to allow the 20% upfront fee and 4% monthly interest.
That proposal has been pushed by lobbyist and former Labor treasurer John Dawkins, who has argued that the loans are a high-risk business with a high rate of default.
The submission puts the case that a 20% upfront fee is necessary to cover costs.
Legislation affecting pay-day loans, formally known as high-cost, short-term lending, was expected to come before parliament before the end of the current sitting.
Mr Shorten has indicated that will be deferred until the May parliamentary sittings.
St Vincent de Paul Society branches have launched a campaign to bombard the minister with emails calling for him to accept the compromise position of a 10% upfront fee and 2% monthly interest rate which would still leave a two-year term $2000 loan with a repayment cost of $3160.
Cash Converters argued short-term loans provided a source of funds for 500,000 Australians annually. St Vincent de Paul Society state branch spokesman Ted Flack said short-term loans could be a necessary source of funds.