Its true loans are wonderful things. Think about it, they wouldnt be so popular if people didnt think they were a good idea!

The percentage of households that do not have a loan of some kind is dramatically small these days. The secret to making loans wonderful for you is to not spend more than you can afford, or want to be able to afford in the future. Plan ahead.

Its all very well having a see it, want it, have to have it approach to shopping but spending beyond your means can pave the way to a rocky road ahead.

Granted it is not always possible to plan ahead due to bad fortune and my deepest sympathies to anyone in dire straits due to ill fate. But for those of us more fortunate and considering buying something that we dont actually physically have the cash for, there are some very simple steps to help you make the right choice.

Firstly are you being realistic? Is the item you wish to purchase vital? OK, so if we all only had the things that were vital you wouldnt be reading this now so when I say vital I really mean is, will the purchase be of real benefit?

Secondly, can you afford it? The easy way to determine if you can is to calculate how much you spend on average each month and how much you save each month. The loan repayments will either be coming out of what you normally save or even what you would normally spend. This is why it is very important to take the time to think things through.

Thirdly, research interest rates. With so many loans on offer the rates vary considerably. Spend a little time looking around. There are a number of ways to see many of the market leading loans available in one place. A comprehensive listing with interest rates and online applications can be found at useful sites such as creditmarket.co.uk.

Fourth on the agenda, only deal with reputable lenders. This will not only ensure you get the best rates but you will also receive top quality information, assistance every step of the way and piece of mind.

Many lenders offer repayment protection so that in the unlikely event that you become unable to repay your loan, an insurance policy in many cases will make the repayments for you. Always read the terms of the repayment protection policy as you may only be entitled to a short repayment break instead of having the loan paid off for you entirely.

Lastly, before you part with your money for that car youve always wanted or the luxury holiday, make sure you are also buying what youre paying for. The last thing you want is end up with an unfinished hotel or constant roadside assistance.

Spend it wisely and take just a little time to plan ahead.