Many people opt for a personal loan to spread the cost of a major purchase such as a holiday or new furniture. For big purchases personal loans often work out cheaper than using a credit card and it's easier to budget for the regular fixed payments. Yet loans often come with hidden costs including arrangement fees and repayment penalties, so you really need to shop around and compare loan offers in detail before deciding on the best option for you. These tips can help:

1. Compare total repayment costs - Looking at these rather than the APRs may reveal that the additional fees and charges on a low-interest loan make it more expensive than you initially thought.
2. Shop around - By seeking quotes you might find the most favourable deals.
3. Negotiate - There are lots of lenders competing for your business and you might be able to arrange a more favourable deal than that initially offered.
4. Don't make multiple applications - Prospective lenders will find out about other recent applications when they check your credit history and might be deterred from lending you money.
5. Protect your credit rating - Ensuring that you have a good credit history will help maximize your chances of obtaining a loan at a low rate of interest.
6. Investigate 'banking packages' - Conducting all your financial business through one bank might help you to secure favourable terms on a loan.
7. Take out a secured personal loan - By securing the debt against your property you could benefit from greatly reduced interest rates, but only if you're prepared to risk losing your home.
8. Consider a second mortgage - Taking out a mortgage to finance expensive home improvements may be cheaper than taking a personal loan.
9. Investigate 'professional' loans - Ask lenders whether they offer preferential rates for your occupational group.
10. Avoid expensive loan insurance - By putting the payments into a high-interest savings account instead you'll have your own emergency fund which will be earning you money. Alternatively, shop around for a stand-alone insurance policy that is cheaper than the lender's recommended policy.
11. Opt for a basic package - Avoiding paying additional charges for facilities that you are not likely to use will reduce the overall cost of your loan.
12. Avoid loans with early repayment penalties - By opting for a no-penalty loan and making additional payments whenever you have surplus cash you'll pay off the loan more quickly. Some lenders allow you to re-borrow the additional amounts you have paid off if you need the money later.
13. Opt for the shortest repayment period possible - Making the maximum repayments you can manage on a shorter-term loan will mean you pay less in interest.
14. Make fortnightly or weekly payments - Splitting your monthly repayment into two or four means you'll pay slightly more each month and will pay the loan off early, saving on interest. You'll gain even more if your interest is calculated daily, as there will be less interest added to your loan each month.