However great the need for some financial help, it pays to shop around to get the best deal possible on a loan. At all costs avoid being seduced into taking on a deal that could prove bad value or, at worst, extortionate!  Many people still go in to their local bank or building society for a loan -- however, it does now pay to look around, particularly with the ease at which the internet now allows you to do this.

While many personal loans are unsecured, a loan for debt consolidation is usually secured. This means that you secure the loan risk by securing it against your property. It should be noted that if loan repayments are not kept up your home could eventually be taken from you.

Even for an unsecured loan, if you fail to keep up with your monthly repayments, a lender may take you to court.  A County Court Judgement (CCJ) may order you to pay off the loan in monthly payments or if you are unable to do that then you could be faced with a bailiff knocking at your door. You do not have to let a bailiff into your home and they cannot break in (unless they have entered previously for that debt). They can legally enter through a door or window that you have left open. Only bailiffs recovering debts owed to the State (e.g. Income Tax and VAT) can force entry to your home.

Earlier this year, the consumer group Which? launched campaigns to help borrowers of two of Britain's highest charging loan companies. For example, despite repaying £43,000 to date, a certain borrower with one of these companies still owed over £200,000 on an initial loan of just £10,800.  It is best to carefully assess the right deal from a trusted loan provider.