According to the federal government's Bureau of Economic Indicators, the average personal loan interest rate in 2005 was 12.05%, and ranged from 11.95% to 12.22%. An increase in rate, but a decline in applications versus 2004.

From the time first settlers arrived up through to the early twentieth century, most consumers had limited access to credit, or found it quite expensive. Only the richer or more politically powerful were able to obtain personal loans from commercial banks, because banks did not grant consumer loans to the general public.

Access to credit was a privilege reserved for the elite, and getting a personal loan meant more than just filling out an application. It required signing countless documents, often including co-signors, collateral, waiting for approval and; if approved, the applicant would have to endure a repayment lecture from the bank officer before receiving the loan.

Times have changed... Today sophisticated processes allow consumers to get credit or a personal loan in a variety of manners, including through an ATM machine, and by leveraging their paycheck instead of their mortgage.

As the popularity of credit cards (which also offer a cash advance), increases, applications for personal loans are declining. It's much easier for consumers to simply use a credit card than to apply and await approval for a personal loan, which they may not qualify for due to bad credit or high risks associated with their card charges. And now, a payday loan offers quicker, and easier qualifications, to obtain cash.

As consumer debt increases and banks' risks rise, some lenders prefer offering a short term, low amount unsecured personal loan, while others may offer large long term personal loans yet opt to require home-ownership as collateral to secure the personal loan. Nonetheless, it is far easier today to obtain credit than our forefathers experienced.

In fact, it's often too easy, causing many Americans to fall into a debt trap, and having to obtain lines of credit in order to repay other lines of credit that are becoming delinquent.

To continue the ease of obtaining personal loans, consumers should use them wisely, and not get into a revolving debt problem such as using the loan to pay off a credit card balance and then simply add new charges onto it.

Toni Phelps is a financial contributor at http://www.CreditFederal.com which offers consumers credit knowledge as well as financial products.