Once upon a time, to borrow money from the bank, you had to put on your best suit and beg the manager.
Banks now call customers at home to see if they want to borrow money. In fact, they almost treat you badly if you don't borrow from them.
It has never been easier or faster at the same time. You can borrow money as quickly as you can book a table at a restaurant. All you have to do is pick up the phone.
A personal loan is about two-thirds of the way up the list, between a credit card and a mortgage.
With a credit card, you can buy that must-have dress or CD before you get paid. For more expensive single expenses, like buying a car, paying for a wedding, or fixing up a house, a personal loan has taken over.
The amount of money borrowed with credit cards fell by GBP300 million in the middle of 2006. However, the amount borrowed through personal loans and overdrafts rose by almost three times what it was in June, according to the latest data from the British Bankers' Association (BBA).
New credit card borrowing dropped to its lowest level in four years, at GBP7 billion. On the other hand, personal loans and overdrafts became more popular, leading to a net lending of GBP655 million.
Even though mortgage lending is going down, the director of statistics at BBA says that other ways to borrow money are becoming more popular and easy to use.
"Unsecured lending is going in a very different direction. The growth rate keeps going down, which is mostly because credit card borrowing is still going down," the director said.
Moneyfacts said in April that credit card transfers can have lower interest rates than personal loans, but that people who don't pay their bills on time could benefit from the structure of a personal loan.
But new research from uSwitch seems to show that the less you borrow on a personal loan in the UK, the more likely you are to pay interest rates that are higher than the lender's APR (APR).
When borrowers try to pay back their loans early, all of the major lenders charge fees. If you pay off the loan early, you will be charged GBP175.
But that's not the end of the charges. Borrowers are tied to the loan for eight years, which is written in small print that is hard to understand.
Given the amounts, loans can last for as long as 25 years. But if you want to pay back your loan in less than three years, you will have to pay interest for six months on the amount you still owe.
Since some customers pay three to four times the going market rate for loans of higher amounts, it is estimated that more than half a million Brits who took out bank loans of less than GBP5,000 in the last year are paying too much.
There may now be someone who has a good reason to say that this policy of giving different interest rates based on how much is being borrowed is hurting them unfairly.
Still, UK loans are one of the cheapest ways for Brits to borrow large amounts of money (over GBP5,000), so costs for small loans (under GBP5,000) from UK banks should be taken with a grain of salt.
The head of personal finance at uSwitch also says to look around for the best deal on a personal loan. He says that interest rates on small loans in the UK are still not very competitive.
This seems to be the case whether or not the personal loan is secured or unsecured, since UK lenders still charge different interest rates for different loan types.
If you are thinking about getting a small loan in the UK with a short repayment period, you should now also think about other ways to borrow, like a credit card with 0% interest.
On the other hand, it might be time for Brits to start thinking about borrowing bigger amounts of money just to bring down the cost of borrowing.
