Everyone goes through periods of financial strife where they just need a bit of a leg up. Securing a personal loan can certainly give you that breathing space, but there are plenty of things to consider before entering into an agreement.

Before shopping around for a personal loan, always look at your situation and decide whether a loan is really necessary. If you can find any other alternative, then it is probably better than getting a loan which will charge you high interest, especially if the loan is unsecured. Even borrowing from a relative could be a better option.

If you’ve decided that a loan is for you, then the first place to start is your bank. Existing customers often get better deals from their bank. But don’t trust that they’ll always be the best rate, go out and shop around before locking yourself into an agreement.

Online resources such as www.canstar.com.au and www.ratecity.com.au are great for comparing rates from different banks and non-banking institutions, so you can find the best deal.

If you’re having trouble getting a loan from the banks, you can always look at other places like community banks, credit unions, or smaller financial institutions. Always be careful though of dodgy lenders and pay-day lenders who charge extortionate interest rates.

To get a lower interest rate, it’s best to secure your loan against some sort of asset like a car or property. Just make sure you make all your payments to avoid the risk of repossession.

Don’t forget to think about how you want the loan set-up: fixed, variable, or a mixture. Depending on how you want to gamble with interest rates, you might want to combine fixed and variable rates.

Getting a personal loan can be handy but, just as with any sort of borrowing, you need to be careful with your spending habits and make sure you stay on top of your repayments. It takes discipline to avoid getting further into financial strife and debt problems.