Check your credit rating
No reputable lender will allow you to borrow money without a credit check, so before you start applying, it's worth considering just how good your credit history really is.
If your history is riddled with defaults and missed payments, you will almost certainly be considered too risky a proposition for most banks, and those loans that are available to you will undoubtedly come with a sky-high interest rate. These days you can check your credit report online with Experian or Equifax to see whether you're in good shape.
Along with a healthy credit score, a bank will take a close look at your employment situation to ensure that you have regular money coming in to cover the cost of repayments, and that often rules out the self-employed.
Before you start applying for loans, make sure that you can answer yes to all of the above, and have enough disposable income to keep up repayments. And remember that each unsuccessful attempt to get a loan will show up on your credit history, which can affect your ability to get credit in the future, so don't rush into multiple applications.
There is a great deal of competition in the world of lending, and that means shopping around is the key to getting the cheapest rate of interest. Comparison sites are a good place to start, although the advertised rate isn't always what you'll get, as the bank may offer a different rate of interest once they've assessed your risk as a borrower.
Also consider that some companies specialise in a particular type of borrowing, such as car loans or consolidation loans, and these could prove a cheaper option. Similarly, it is important to decide whether it is a business or personal loan you require, and look at the options when it comes to secured or unsecured borrowing. Banks will often look more favourably on an application for a secured loan, but failure to keep up with repayments means you could risk losing your home.
Whatever type of loan you decide to go for, ask lenders to provide a cost illustration before you apply - that way you will have a better idea of interest rates and monthly costs without risking your credit score taking a hit.
Remember, taking out a bank loan comes with risks attached and you should not enter into an agreement lightly. Even if your application is successful, you could end up with a mounting debt problem or worse if you fail to make repayments on time for the full term, so be honest when you do your sums.