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A personal loan gives you a cash boost for when you most need it.

Your loan could go towards paying for a new car, home improvements or a holiday, perhaps, or to consolidate your debts into one easy-to-manage monthly payment.

All you need to do is make sure you can afford the loan and that you're getting a good deal. Take 10 minutes to check out your options.

Before you begin: Work out how much you need
Most personal loans can be for up to £15,000, although some companies offer up to £25,000 or more. However, you should only ever borrow as much as you need. So, for instance, if you're buying a new car, negotiate with the dealer or seller first to agree the price.

If you borrow too much money, the loan will cost you more in the long run. If you borrow too little, it'll cost you to arrange more borrowing.

If you're using the loan to pay off all your other debts, you need to know:
- The total amount you owe
- How much your total monthly minimum repayments are
- The interest rate you are paying

Step 1: Work out what you can repay each month
Buying a new car and then not being able to afford petrol any more could be frustrating. That's why you need to know how much money you can spare each month to pay off your loan without leaving you short for your normal monthly expenses.

Tot up your total monthly expenses, including:
- Rent or mortgage
- Monthly bills, direct debits and standing orders
- Food, entertainment and travel
- Credit card and loan repayments
- Council tax, insurance premiums, water rates etc

Take this away from your monthly income. Whatever is left over is how much you could afford to repay a month. However, to give you some surplus in case of unforeseen monthly expenses, it's best not to use it all for repaying the loan.

If your household income is already the same or less than your monthly outgoings, you should think again about whether you're ready to take out a loan.

Step 2: Decide if you want a secured loan
A secured loan is a debt that is tied to your house. If you can't pay the loan back, you may be forced to sell your home to raise the money to pay the loan off. Secured loans tend to be for bigger amounts because the lenders want the extra security. They tend to come with lower interest rates too.

Step 3: Consider protecting your repayments
In case you suddenly can't make your monthly payments (say, you lose your job), you can buy insurance that will continue to pay off your loan until you can start paying it yourself again, or until the loan is paid off.

Most lenders offer this sort of protection. Some insist on it. It can be expensive, so you need to assess carefully whether you think you might need it. As an extra cost, it may affect how much you can afford to borrow.

Always ask your lender to explain fully what the repayment insurance covers, and exactly how much it costs per month.

Step 4: Approach your existing bank
With a clear idea of how much you want to borrow and what you can afford to pay back each month, ask your bank to make you an offer for a loan. They know you already and, if you're a good customer, you may get a better deal from them than from another bank or specialist loan company.

Step 5: Understand what you're being offered
The key information in any offer is:
- The total amount of money you will have to pay back
- The term of the loan, ie, how long you've got to pay it back
- What it costs if you pay the loan back early (so-called redemption penalties)
- How much, if any, you pay each month to protect your payments
- The annual percentage rate (APR)

The APR is the most important interest rate figure. Some lenders also quote monthly figures because it allows you to make a like-for-like comparison with any other loan, regardless of how the other details may differ.

In general, the lower the APR, the better the deal. If a potential lender does not supply the APR figure, insist that they do.

Step 6: Shop around
As with most financial products, it pays to around. As well as other banks, you can also approach specialist loan companies, some of which you may have seen advertised on the television.

Remember, though, that loans providers are not closely regulated. For instance, some smaller companies attract customers by offering great monthly interest rates that disguise a much higher APR.

If in doubt, go with the best deal from a company that you've heard of. Personal recommendations are valuable too.

Step 7: Compare your offers
For most people, a good deal is one that:
- Comes from a reputable company or bank
- Offers a competitive APR compared to all your other offers
- Has a monthly repayment that you can afford without difficulty
- Covers the total amount you want to borrow

If none of your offers comes with a monthly repayment amount that you're certain you can afford, you need to think again about taking out a loan, or about reducing the amount you want to borrow.