According to experts, banks are increasing the interest they charge on personal loans as they try to ‘recoup the losses stemming from defaults on loans’, the Telegraph reports.

The effects of the recession, including rising unemployment, have led to many households finding their debt repayments difficult to make – and as a result, the interest rates on personal loans have reached the highest level in nine years.

An IVA expert for the IVA Forum commented: “Many people who were struggling to afford their debt repayments before the recession began will be finding it impossible now.

“We would advise anyone in that situation to seek professional debt advice. The right debt adviser should be able to help them identify the best solution to their debt problems.”