As the cost of living in the UK grows steadily higher, more people are having to borrow money to meet their financial commitments.

However, at the same time, it has never been more important to shop around and compare the products on offer as lenders tighten their belts and make easy credit harder to come by.

Research recently carried out by Moneyfact found that personal loan rates have increased by an average of 1.7 per cent over the past year alone, with 27 changes having been introduced in the sector in 2008.

Given that the general economic uncertainty means that nobody really knows what their financial situation will be like in just a few years' time, experts have advised that, in spite of the need for short-term money solutions, consumers should really think twice before signing up for a loan secured on their home.

At present, such a policy is relatively popular among Britons, with total secured lending on UK homes now standing at £1,187 billion, representing an increase of 9.7 per cent over the past 12 months.

Despite its popularity, however, Fool.co.uk has joined the many financial advisory groups cautioning against this.

As David Kuo, head of personal finance for the website, explains: "By avoiding secured loans borrowers will ensure that their home is not put at risk."

As well as guarding against signing up for a secured loan, Mr Kuo also advised that Brits should look for the most flexible product available so as to take advantage of possible fluctuations in the economy.

"The option of flexibility will allow a borrower to repay a loan earlier, and cut the total cost of the loan," he noted.

For example, while the economic outlook may look gloomy now - with research even revealing that growing numbers of people are fearing for their job security - if, or when, the UK's big lenders are able to pass on the Bank of England's interest rate cuts to consumers, many borrowers may be in a position to pay off their loans early on and save themselves some money.

Perhaps, however, the best way forward for the time being is to cut back on expenditure and hold tight during the slowdown rather than borrowing in order to maintain the same standard of living as in more prosperous times.

Indeed, as banks compete with each other to tempt people to invest their money, consumers would be better off taking advantage of high savings rates and delaying any non-necessary purchases.