Efforts to boost lending suffered a setback last month after new figures showed mortgage approvals for home-buyers fell for the first time in six months.
The number of approvals for house purchase dropped 14% on the previous year to 32,288 in January, with the bad weather among reasons for the weaker demand, the British Bankers' Association (BBA) revealed.
Low consumer confidence was also blamed for the poor month, which offset recent signs of lending improvement on the back of the Bank of England and Treasury's £80 billion Funding for Lending scheme.
The BBA report said demand for loans and overdrafts remained relatively weak, with repayment of unsecured personal loans outweighing new borrowing.
The outstanding level of borrowing through personal loans is almost half its level since its peak in late 2007 and early 2008, with the total balance owed by consumers on all personal loans at £34.5 billion in January.
Net borrowing on credit cards increased by £100 million last month, less than the £278 million in December as people relied more heavily on their credit cards to get them through Christmas. Overall, the outstanding level of non-mortgage consumer borrowing shrank back by 1.6% over the year to January, which was driven by a sharp 7% contraction in personal loan and overdraft lending.
BBA statistics director David Dooks said: "While general economic growth stalls, low consumer and business confidence generates a natural tendency to restrain borrowing appetite, repay borrowing where possible and to build up cash and savings as a buffer."
But Chris Williamson, chief economist at Markit, said there was little evidence of the Government's Funding for Lending scheme driving more bank lending, with mortgage approvals still running at almost half the level they were before the financial crisis.
Matthew Pointon, property economist at Capital Economics, said: "While the bad weather didn't help matters, this is a timely reminder that the recent pick-up in housing market activity is not based on firm foundations."