You know how it is, you find something you wanted for a while - like a new car or a home improvement - but your current financial situation means that you can not afford it at that time.

In this case, you have one of two options: hold for now and collect some savings to afford, said element, or you could borrow the money to make a quick purchase. There are a multitude of different types of loans available, with varying degrees of security, payment options and maturities:

* Secured Loans - securing an asset against the policy - such as a car or property - as collateral.

* Unsecured loans - cash loans without collateral, usually sold by financial institutions under a number of different packages - such as personal loans and corporate bonds.

* Payday loans - short-term loans, which provide a safety net til payday (hence the name), but usually with a high interest rate

Loans can be useful for the offers substantial purchases, but it can also be a risky business if you do not play your cards right. Here are some practical tips to consider before you commit to a loan deal:

* Consider your current situation and whether you are financially healthy. If you have a lot of financial commitments already, the addition of a loan to your portfolio could have implications in the future.

* Establishing a financing plan - including the monthly expenditure and spending your current situation - and make a list of financial milestones to keep reducing the non-essentials and reduce your current spending levels to protect your finances healthy, so your chances that a loan approved.

* It may be worth exploring your credit record before the unsecured loan deals. As you are not securing the loan against a particular asset that can be risky, if you are unable to afford repayments.

By making sure that you give yourself a thorough financial health check beforehand, and keep up with the repayments, you can get the most out of your loan plan but also help to protect your credit result in a healthy condition.