As with all borrowing, your goal should be to minimise the amount that you repay, so pay close attention to the interest rate (which may be variable) and fees being charged. It's also highly advise that you have details of all charges for credit in writing as well as a bottom line figure including loan interest and loan charges for the amount that you will be repaying over the life of the loan. Get it right and the TAR for a £25,000 loan over five years could be as low as £29,775 (7.34% APR). Get it wrong and the total could be as high as £38,884 (21.27% APR). Ouch!

Finally, don't be tempted to borrow more than you need and, while taking affordability into account, aim to arrange your loan over the shortest period possible, as this will minimise your final interest bill. In addition, don't become too eager on keep on borrowing against your home, because it's your dwelling, not a cash machine!

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