Toronto city councillors have voted to look at ways to restrict where payday loan operators can set up shop in the city, to protect low-income Torontonians from spiralling into debt.

Council approved a request Friday to the mayor's executive committee to look at drafting a bylaw that would stop payday loan branches from clustering in certain neighbourhoods.

The proposal is considered a first step toward limiting the number of payday lenders in Toronto.

Rohan Jagroo is one of the many people city councillors are trying to protect.

Jagroo said he required cash quickly when he got married in 2013.

"I had no choice. I needed the money," he said.

That decision led to a spiral of debt that took him years to overcome. Jagroo said he was using three payday lenders at one point in time as he borrowed from one to pay another.

"For two years and nine months, I never saw a paycheque," he said, explaining how lenders seized his money before he could see it.

"I had nothing in the bank."

Rohan Jagroo says he was using three payday lenders at one point in time as he borrowed from one to pay another. (CBC)

"It's no coincidence that there's a cluster effect of payday lenders in low-income neighbourhoods," said Coun. Kristyn Wong-Tam, one of two councillors who tabled the motion.

She said many people who reside in her inner-city ward are often living paycheque to paycheque, leaving many vulnerable to spiralling into a debt crisis.

The Canadian Payday Loan Association has stated it is concerned Toronto would place restrictions on where private businesses can operate. The group said these types of lending enterprises are regulated by the provincial government.

The province of Ontario is considering new legislation aimed at capping fees charged by payday loan firms along with bringing in a grace period for borrowers.