Jill Coyle, a spokesperson for Direct Line Loans, said that force of habit had more to do with the choice of high street banks for loans than financial reason.

“Many customers still go straight to their own bank when they need a loan as it’s the way they have always conducted their financial business,” Ms Coyle said.

“Often they do not consider direct lenders like ourselves,” she continued.

“We can offer more competitive rates as we do not incur many of the same overheads, such as a branch network.”

Lending companies who conduct the majority of their business on the internet are offering more competitive rates than traditional high street banks, according to best buy tables published recently and borrowers are urged to shop around, particularly on the internet, before committing when you walk into a bank’s branch.

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