If it's too late and the damage has been done then a loan could make your debt repayments cheaper. Moneysupermarket.com research shows that loan applications typically increase by 65% in January and February. If you are in need of some financial hair of the dog then take a few minutes to review your budget and assess what you can afford to borrow and for how long. Deduct your total monthly bills and outgoings from your income to find out how much disposable income you have. Be realistic. Then make sure you get the best value for money and avoid the common rip-offs and pitfalls.

Here's what to look out for:

Expensive loans: These are the norm, unfortunately. Of course you will only know what is expensive if you shop around. At this time of year particularly, banks and lenders are marketing their loan offers heavily and will each claim to be great value. It's up to you to resist the urge to opt for the first offer which comes through the letterbox. As with credit cards, the key to the cost of your loan is determined by the Annual Percentage Rate (APR) which relates to the interest you will pay on the cash you borrow.

Current loan rates can vary from as low as 5.5% APR to more than 20% APR. All lenders must show clearly what the APR rate for any loan is so you can compare products and to see the true rate of interest they would pay. You may want to find a fixed rate if you require certainty about your monthly payments. The selection charts on moneyfacts.co.uk show some of the best repayment rates avilable.

Affordability: Aim to pay the money back in as short a time as possible according to what you can afford. Lenders often give lower interest rates if you borrow larger amounts or pay back over a longer period but is that really what you want? Don't be tempted to over-borrow and make your situation worse, even if the cash is being handed to you on a plate.

The rate lottery: this affects more than one in six Brits - rising to a quarter for those aged 30-50 - who have not got a loan at the rate they originally applied for. Moneysupermarket.com research shows the extent of the credit lottery, where 93% of loan providers offer 'typical' loan rates calculated on a price for 'risk basis'. This is where you are offered a rate according to the lender's assessment of your credit score. Many people are so pleased to get the loan that they overlook the higher rate or cannot be bothered to decline the offer and start again. The credit check will also have left a 'footprint' on your credit record and this may prompt the next lender you approach to offer a more expensive loan because they can see you have recently applied for credit elsewhere.

Under current Office of Fair Trading guidelines, lenders are obliged to offer the typical rate to just 66% of all accepted applicants so a third pay rates higher than the typical rate and this will not be known until after the application has been made. The use of typical rates means it is difficult for consumers to compare rates when they are initially shopping around for a loan as they are unable to see from the outset what rate they will actually pay. Moneysupermarket.com, utilising Equifax credit expertise, has launched a new SmartSearch loans channel which enables people to search and apply for the best loan to suit their credit profile.

Payment protection insurance: expensive cover which will pay off some or all of the loan if you become sick or unemployed. If you want it, shop around for the cheapest on offer and read the small print thoroughly for exclusions. The insurance may not pay out for long and may not pay out at all in certain circumstances so assume nothing. It is often included automatically so make sure it is removed if you don't want it.

Early repayment penalties: when you take out your loan, you may have no expectation of any cash to repay it early. But 70% of borrowers do just that. With many loans, however, it is not as simple as clearing the debt and walking away. You are likely to be charged a penalty which may be a flat fee or a percentage of the loan. Flexible loans are available which avoid this problem.

And finally, a couple of words of advice for next year. To avoid hangovers: milk thistle. To avoid loans: plan ahead.