Banks are increasingly reluctant to lend money with rates for loans increasing by as much as 9 percentage points in the past four weeks.

Eight providers have upped their rates while the number of loans available has dropped from 56 to 52, according to the price comparison site Uswitch.com

Black Horse has increased rates by up to 9 per cent, so loans of between £1,000-£2,999 now cost up to 36.9 per cent. For loans of £5,000-£7,499 the rate is 25.9 per cent.

The increase highlights the growing reluctance of lenders to offer money in an increasingly uncertain economic climate.

Interest rates on personal loans are at a seven-year high, according Moneyfacts.co.uk, another personal finance website.

Michelle Slade, of Moneyfacts said: "Since August 2006 the average rate on offer for a £5,000 loan over three years has increased from 8.1 per cent to 11 per cent. With no signs that conditions are going to get better in the near future, rates could move much higher."

Others that have increased loan rates in the past 28 days include Bank of Ireland, Bradford & Bingley, Lloyds TSB and Marks and Spencer.

In contrast, banks are boosting saving rates with many, including West Bromwich, Kaupthing Edge and Manchester Building Society offering more than 6.5 per cent. Fixed rate bonds from the likes of the AA, and the Indian bank ICICI, top 7 per cent.

Louise Bond, personal finance manager at uSwitch, said: "Personal loan 'best buys' are changing every day which demonstrates just how unpredictable and volatile the current climate really is."

The best loan for £10,000 over five years is from Yourpersonalloan.co.uk which offers a rate of 7.6 per cent. The repayments would cost £200.76 a month.

Borrowers should remember that adding payment protection insurance (PPI), often sold alongside a loan, will make the loan even more expensive. Repaying £5,000 on a Barclaycard loan would cost £155.71 a month without insurance, or £179.11 with cover.

PPI has been heavily criticised for being overpriced and riddled with exclusions. Which?, the consumer group, says that a third of borrowers who have taken PPI with a loan would be unable to claim on the policy.

The Financial Services Authority said last week that it will crack down on lenders who fail to highlight the true cost of adding PPI to a loan.