Overdrawing by £100 at high street banks for a month is as costly as borrowing the same amount from a payday lender, according to Which? research this week.
For those wanting small loans rather than an overdraft, the same squeeze applies.
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While larger personal loans are cheaper than for years, if you need a smaller sum you could be charged interest of over 20% per annum.
Rates on larger personal loans have plummeted in recent years. Lenders such as the Clydesdale are offering loans of £7500 or more at rates of 5% pa or less, but smaller borrowers are being charged up to five times as much, according to research by Andrew Hagger of Moneycomms.co.uk.
One of the worst is the Halifax, charging 24.9% pa for loans of £3000 repaid over three or five years but only 7.4% if borrowers want loans of £7500 or more for the same period. Clydesdale charges smaller borrowers 17.9%, more than three times the rate for big borrowers.
Halifax is reluctant to explain why it punishes smaller borrowers, saying only rates are "determined by a number of factors". The Clydesdale declined to comment.
One bank spokesman who asked to remain anonymous explained: "It's all to do with risk. With small amounts we ask ourselves why hasn't this person been able to save up that money and if they haven't, will they be able to pay it back?"
Hagger says: "I have never been able to get a straight answer from the banks as to why they charge smaller borrowers so much more.
"It may be partly to do with past experience of higher defaults on smaller loans but it is also easier for them to administer, say, one £10,000 loan than five £2000 loans."
For those who want smaller amounts it is better to steer clear of the high street banks. There are cheaper options. Sainsbury's Bank and Tesco Bank are only charging 12.7% and 12.8% for smaller loans.
There is also the credit card route. MBNA is still offering its Rate for Life card where purchases made in the first 90 days cost 6.9% for as long as it takes you to clear the balance.
A newer source of loans for small borrowers is peer-to-peer lenders, such as Zopa and RateSetter, which offer smaller loans at below 10%. These loans are funded by individuals who place their money in these social lending pools to get a higher return. This is completely different from payday loans and borrowers will face proper credit checks.
An attractive choice for many is a credit union. There are over 100 in Scotland. Glasgow Credit Union, the largest in the UK, can provide loans to anyone who lives or works in the "G" postcode area.
June Walker, chief executive of Glasgow Credit Union, says: "We will grant immediate loans to new members providing they also start saving a minimum of £10 per month." It is currently charging 12.9% for loans regardless of size. Walker points out: "The low rates which many lenders quote are representative rates for those borrowers who have the top credit ratings, but we charge everyone the same. We do not use credit rating scorecards - we have personal underwriters who have look at potential borrowers' circumstances and the affordability of the loan. We will lend up to seven years, at half-year intervals …We are more like old-style banking."
Kenny MacLeod, chief executive of Scotwest Credit Union, said: "There is no requirement to have savings with us and should a member's circumstances change we try to help them as much as possible."