Personal loan rates are at a scary nine-year high, despite the bank base rate being at an all-time low.

Basically lenders are scared that the money they lend for loans to individuals won't be repaid. Although the recession is technically over unemployment is at a near 13-year high of almost 2.5 million, and many families are still struggling financially.

Put simply, personal loans are risky business.

Financial analyst Moneyfacts.co.uk says when loan rates last peaked in 2001 the Bank of England base rate stood at 6%, the highest point in the last decade and much more than today's interest rate of 0.5%.

Michelle Slade, spokesperson for Moneyfacts says: "Unlike on a mortgage, there is no security that a personal loan debt will be repaid.

"In such a risk adverse market, lenders are only offering loans to the most creditworthy applicants and then at a premium. The post-Christmas loan sales that we see each January did not materialise, a further indication that lenders do not want to encourage unsecured lending."

In January 2007 before the credit crunch took hold, personal loan rates were being offered at 5.8% which was a mere 0.55% above base rate at that time. Experts say that with such ultra thin margins these rates were not sustainable and any defaults would soon wipe out the profit margin on the loan itself.

Since then we've seen some changes to the way payment protection insurance or PPI is sold. These insurance policies used to make much more money for the lender than the loan itself but bad press and new rules about such cover means it's not the cash cow for lenders it once was.

The cheapest rates are now around the 8% mark for personal loans of £5,000 over three years but generally applicants going for bigger loans can get cheaper rates.

The best thing to do if you need a loan is shop around – and make sure you keep a clean credit record. You can check your credit record with a credit monitoring service.