"Neither a borrower nor a lender be," Lord Polonius famously said in Shakespeare’s Hamlet. In an ideal world, this is clearly good advice, but Mr Polonius had two distinct advantages: he was rich and the year was 1603.

These days the majority of people are forced to borrow money at one time or another to pay for things they need to get on in every day life. For example, a medical emergency, a new boiler when your existing one has packed up in the dead of winter or additional bedroom if you have a new arrival on the way and can’t afford to move to a bigger house.

There are also sensible, if not crucial, reasons it could make sense to take a loan. For example, if you have outstanding balances on credit cards which charge notoriously high rates of interest. By taking a cheaper loan, you can use the money to pay off these cards – known as consolidating your debts – and save money in the process. It may also be that, while you could afford to carry out repairs on your old car, it would be throwing good money after bad and it makes longer-term economic sense to take a loan and buy a new one.

Lastly, there is still a huge market for loans taken for reasons that would make Lord Polonius turn in his grave. You have not quite managed to save £1,000 for that well-deserved holiday to the Caribbean for example or you simply have to own the new ‘cinematic’ flat screen TV.

But no loan should be taken lightly – even if the interest rate looks competitive, it can take years to repay by which time your tan will have long faded and your TV will look old. And, depending on the type of loan you take, there can be long-term consequences for your home and flexibility of living.

Read the CashQuestions guide to loans before you do anything and – if you are still sure you need a loan – look at our unbiased comparative tables for the best deals on the market.

CashQuestions Guide to Unsecured Loans

CashQuestions Guide to Secured Loans

CashQuestions Guide to Choosing a Loan

The Importance of your Credit Rating

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