The amount lenders are charging borrowers is considerably more than the Bank of England’s base rate, new research has revealed.
A study by price comparison website MoneyExpert.com has claimed the situation is affecting some Britons’ ability to afford repayments.
It reports that one in 50 people have failed to make a payment to a personal loan during the six months to December last year.
Chief executive of MoneyExpert.com Sean Gardner suggested that the rising cost of living means many people are borrowing to "tide themselves over".
However, he warned borrowers to consider the overall cost of their loan.
"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," Mr Gardner concluded.
Last month the Bank lowered the base rate to 5.5 per cent, from 5.75 per cent.