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People looking to take out loans must take the time to shop around, according to uSwitch.

Research by the group has revealed that over the past 13 months even the best deals are costing borrowers more. It claims the interest rate on a competitive loan of £8,000 over four years has risen from 6.1 per cent APR to 7.4 per cent APR.

Borrowers are also warned that rejection rates for loans are increasing. Since the beginning of the credit crunch, it is estimated that 1.39 million people have had their loan applications rejected.

However, uSwitch claims for those who are prepared to shop around, good deals can be had. Simeon Linstead, head of personal finance, said: "The market is vast and there are still competitive rates for those who take the time to compare the offers available."

In order to increase their chances of being accepted for a loan, GE Home Money Lending claims borrowers should make sure their credit files are up to date, close down any unused credit cards and use price comparison websites.