Since November 2006, MoneyExpert.com has noted that lenders have increased average loan rates by more than the base rate across every single loan value threshold.
According to the firm, this is now hampering people’s ability to repay their loans, with close to a million people failing to make a payment on a personal loan in the six months to December 21 2007.
People looking to borrow around £3,000 are thought to be hardest hit by these borrowing hikes, after the average rates on such a loan increased by 2.55 per cent since November 2006 to hit today's figure of 14.9 per cent.
Even borrowers looking for larger loans – typically more attractive customers for lenders – haven’t escaped the price hikes.
The interest rate on a typical £12,500 advance will cost 1.6 per cent more than it did just over a year ago, rising from an average 7.1 per cent to 8.78 per cent now.
MoneyExpert.com's chief executive, Sean Gardner, said: “With the cost of living on the increase, the obvious thing to do for anyone feeling the strain is to borrow money to tide themselves over, but people must be wary of the overall cost.
"A set of monthly payments may seem manageable but you always end up repaying much more than you borrow. The golden rule is only borrow what you are certain you can afford to repay."
Current conditions have led to lenders getting tougher on applications, with some firms such as LV=, GE Money and Leeds Building Society pulling out of the unsecured loans market entirely.
