Personal Finance

It seems a financial storm is brewing, clouds are gathering over the economy and the future's looking turbulent. Interest rates rose steeply in 2007 and there are signs that house prices are starting to fall in some areas of the UK. There is turmoil in the global financial markets, triggered by problems in the US mortgage market and Britain's fifth largest mortgage lender Northern Rock has all but collapsed.

The knock on effect of all this is the rising cost of borrowing as more and more lenders become cautious about who they lend to.

Few of us could organise our finances without some level of debt, but some of us are paying well over the odds for loans, credit cards and mortgages. It's important to shop around and don't assume your bank will offer you the best deal.

Although we often assume that big is beautiful when it comes to choosing a lender, this is rarely the case. In fact, according to financial analyst Moneyfacts, borrowing from a large or well-known bank can mean getting a bad deal.

The golden rule of borrowing is simply shop around and don't be lured by the big players' huge advertising budgets.

Many people simply go straight to their bank when they want a personal loan. However your bank may not offer the best deal. Even though rates for personal loans have risen in the past few months, there are plenty of good deals out there if you are prepared to look.

Credit card borrowing can be hugely expensive with most credit card issuers charging between 12% and 30% APR for the privilege of lending you money. With plenty of zero-interest offers around, moving your debt could save you a significant amount of money.

If your current mortgage deal is about to expire, you need to start thinking about remortgaging, if you fail to react you'll end up paying your lender's highly expensive standard variable rate(SVR).