According to the British Banking Association (BBA), borrowing with either a loan or an overdraft has grown by 4.4 per cent during the past twelve months, the fastest growth since the financial crisis of 2008.
During and after the recession, bank clients were more cautious but confidence is now at a six year high.
Some experts are expressing concern than many of those choosing to borrow money from their banks could find themselves in financial difficulty should interest rates rise from their record low of 0.5 per cent.
Analysts believe that borrowing has increased because wage levels have remained fairly stagnant and many households are feeling the squeeze on their ability to make larger purchases.
Many consumers are choosing to make purchases they have put off for years. Chief economist at the BBA, Richard Woolhouse, said that demand for personal overdrafts and loans has risen steeply during the past year. Consumers are clearly feeling more confident about more expensive purchases such as cars, holidays or home improvements and this is indicative of the recovery of the economy.
However, Mr Woolhouse added, the number of consumers choosing to place their savings in High street banks is reducing, probably because of the higher interest rates offered by the new Pensioner Bonds.
Michelle Highman, chief executive of the Money Charity, said that the increase in loans and overdrafts over the past twelve months shows that the banks are increasingly willing to lend money to their clients.
Unsecured borrowing is likely to boom over the coming five years, reaching 55 per cent of total household incomes by 2020 according to the Office of Budget Responsibility (OBR). The current level is 37 per cent.
The OBR is also predicting that house prices will increase by as much as 30 per cent by 2020.