The collective debt on personal loans and overdrafts, at £52 billion, is at its lowest for a decade, the BBA reported.
Meanwhile, paying down debts among firms seems to be a higher priority than seeking new loans.
The new figures also indicated that savings and personal deposits with the main high street banks rose slightly in July.
That said, the rate of increase in savings was still muted. In the first seven months of the year, total savings have climbed by £8.6 billion, compared with the £16.3 billion increase during the corresponding period in 2010.
In the corporate sector, debt repayments more or less cancelled new borrowings among businesses.
David Dooks, the BBA’s statistics director, commented: “Overall companies’ appetite for finance remains low, reflecting business decisions in difficult trading conditions – new finance made available to one company is simply being offset by debt repayment from another.”