Unsecured loans have their extra mark among the consumers. The loan rates are touching the new height in the financial market.

Unsecured personal loan rates have soared by 40 per cent over the past five years, hill-walking from an average 8.71 per cent to 12.27 per cent.

"With the base rate now a mere 0.5 per cent compared with 4.75 per cent five years ago, lenders' margins have shot up from 3.96 per cent to a staggering 11.77 per cent," says Andrew Hagger of Moneynet.

The number of lenders in the unsecured loan market has also shrunk – in fact it has more than halved from 62 back in 2004 to just 29 today.

Pierre Williams, head of research at MoneyExpert.com, says: "The days of cheap loans are long gone. Rates are sky high with many of the banks building in a very healthy margin to insure against defaults, which remain a real possibility with unemployment creeping ever higher.”