Personal loan searches double in 12 months

The study further showed that the number of people looking for personal loans online has doubled over the past 12 months. Applications are up by 69%. 

Rates on personal loans – also known as unsecured loans – tend to be typically lower than on credit cards, making them more attractive to prospective claimants.  

M&S Bank is currently offering loans up to £25,000 from just 2.8% annual percentage rate (APR), the lowest on the market, The Independent reported. 

A more typical market rate can be found at the AA and the Post Office, with loans marketed at 8.1% APR. 

In contrast, overdraft rates tend to compare at around 40%, whilst credit card rates scale from circa 16% to 30%. 

It therefore makes sense to many people to take out a personal loan to pay off debts at a high rate – although the rate advertised is not necessarily what will need to be repaid.  

Experian found 18% of those surveyed said they didn’t understand that a headline rate might not be available to them. 

The study also revealed that one in five Britons have either accrued further debt in 2022 or is planning to over the coming months.