Borrowers can now expect to pay around 10.32 per cent annual percentage rate (APR) for a £5,000 loan, a price comparison website has stated.

According to the price comparison site, the gap between the average loan rate and the Bank of England's base rate has now increased from 3.4 per cent last year to 9.8 per cent in 2009.

The figures show that borrowers could expect to pay around eight per cent for loans which are above £10,000. This indicates an estimated one per cent increase on rates last year.

Tim Moss, the head of loans and debt at the price comparison website, said: "Despite the Bank of England slashing the base rate to 0.5 per cent in March, loan rates have continued to rise, leaving consumers paying through the nose for their personal loans. Borrowers looking for a smaller loan of around £5,000 will be hit harder than those looking to borrow more.

"We have seen a recent glimmer of hope as loan rates crept down slightly in August. Competition seems to be returning to the loan market which is great news for consumers - however lenders will need to continue reducing rates if they want to draw customers back, particularly those who want to reconsolidate their debt."

Mr Moss also added: "With lending criteria becoming more and more stringent, it's important to keep your credit record as clean as possible and not taint it with failed applications for loans."