Research by credit experts has found interest rates on prime purchase loans of £3,000, £5,000 and £10,000 have doubled.
Totally Money found that the average cost of a market-leading £3,000 loan has risen by 3.18 percentage points.
This means borrowers will have to pay an additional £145 over 36 months.
In addition, interest increases on some of the top £5,000 loans led to an extra increase in interest rate charges of £308.88.
The average APR on these loans has more than doubled in the last 48 months, from 3.30 percent to 7.30 percent.
According to Totally Money, lenders’ customers are now 21 percent less likely to qualify for a loan.
Additionally, the Bank of England predicts that there will be an increase in both the demand for unsecured loans and the number of defaults between October and December this year.
Andrew Hagger, personal finance expert at Moneycomms.co.uk, highlighted the daily reality of borrowers struggling with these rising rates.
He explained: “It’s not just credit card and overdraft borrowing costs that are putting a strain on consumers’ finances, but opting for a personal loan has also become much more expensive.
“For those looking to borrow money to replace their car, do some home renovations or consolidate debt, interest rates are now more than double what they were before the base rate hikes began.
“A few extra pounds each month might not seem like much, but when you look at the full term of the loan it’s a huge extra cost – borrowing £10,000 over five years, for example, will set you back £863 more in interest costs.”
