A lot of people don't really look beyond their current account provider when they're looking for a loan

Callum Dyce, Datamonitor

Meanwhile over the same period average earnings have grown by only 28.5%.

Datamonitor said that most lenders thought the current debt levels were sustainable given the cheapness of many credit deals.

Last month the latest lending figures from the Bank of England showed consumer credit growing at its fastest rate since its records began in 1993.

The credit boom has raised fears of unsustainable levels of consumer spending, which could stoke inflationary pressures.

But Datamonitor's report suggests the current credit deals are unlikely to get any better.

You need to make sure that you're not over-extending yourself

Francis Walker, Consumer Credit Counselling Service

"Personal loan prices have now reached a floor," said the report's author Callum Dyce.

"This is the result of bottomed-out interest rates, narrowing margins, inflexible cost bases, and tighter lending policies in the light of economic uncertainty."

Growth in consumer credit is forecast to slow over the next five years as both borrowers and lenders become more cautious about the future.

By 2006, Datamonitor forecasts unsecured consumer credit will have reached �239.8bn.

Missed savings

Despite the cheapness of some loan deals, Datamonitor found that most UK consumers were failing to shop around to find the best offer.

Outstanding consumer credit

2001: �140.1bn 2000: �127.3bn 1999: �115.4bn 1998: �102.2bn 1997: �88.1bn 1996: �77.5bn 1995: �68.2bn Data: Fourth quarter Source: Datamonitor/ONS

"I think a lot of people don't really look beyond their current account provider when they're looking for a loan," said Mr Dyce.

"Some do maybe research one or two options but certainly not a lot."

The report found that the potential savings for borrowers were "enormous".

In November, the highest price loan provider in the market advertised an APR of 15.9% for a �5,000 loan, whereas the same loan from the lowest price provider offered an APR of only 8.5%.

Net expansion

Datamonitor said it expected consumers to become more willing to turn to other loan providers in the future.

It said this would be due to a mixture of attractive offers from new lenders, government measures to increase banking competition, and increased use of the internet.

The net is already being used to compare loan deals, and use is expected to expand dramatically when the government allows completion of loan agreements online.

Keeping debt under control

Consumer groups warn that people need to keep a close eye on their borrowings, as although loans are cheap at the moment, circumstances can change quickly.

"It's not so much how much debt you have. it's how much debt you have relative to your income that's the problem," Francis Walker of the Consumer Credit Counselling Service told BBC Radio 4's Today programme.

"You need to make sure that you're not over-extending yourself."

"A simple rule of thumb is to add up all the money that you have to pay every month, excluding your mortgage, and if it comes to more than 20% of your net income you're over-extended and you need to cut back."