The Motley Fool has stated that it may be an idea to borrow the absolute minimum as a result, as this can help bring interest levels down.

It added that a shorter-term deal is a good idea, while people should also consider looking into variable rate deals – but only if they can afford the worst-case scenario.

Similarly, the firm pointed out that the four per cent rise in insolvencies in the past year should act as a suitable warning to those considering a larger loan.

“Taking on debt may sometimes seem like an easy option, but a personal loan can quickly turn into a millstone around our necks, which can only be removed by drastic measures,” commented David Kuo, head of personal finance for the firm.

However, with summer here and many last minute holiday deals available, it may be that some look to loans in order to finance a dream trip abroad.

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