I went on the internet to arrange a loan from a company at 5.6%.I filled all the forms in was later contacted by phone to say i had been accepted for the amount required.
The next day after returning home i opened my post and the the forms were there ready to sign andsend back.After reading them the repayments were not the same as the original estimate and had increased by £12 a month.I rang to query this and was told after they had done credit checks this was the new amount i would have to pay. I mentioned that i had previously had two loans with themselves and had never missed a repayment and had in fact finished one of them early .Apparently this still had no bearing and I could not understand that as i don't have any credit cards,debts, mortage etc i would be penalised for this !
I went to another company which was slightly lower than them and have now struck a deal with them.So if i was a regular defaulter on bills etc would i have got it cheaper ?

If you were a regular defaulter on bills etc, you run the risk of being turned down altogether!

Different companies work in different ways, some Banks do a great rate for all, no matter what your circumstances you will get the best rate. However, they are fussy about who they lend to, they cant afford to take too many risks. So they will either do the great rate, or not do it at all.

Other Banks do individual pricing, they have great rates, but they will factor in any risks to their rates, so if you have a low income, or if your job isn't as secure as say a GP, then the risk is greater so the rate is higher. They are less likely to turn you down, but you will pay more on the rate.

At 5.6% the Bank/Finance company will make a pittance in the great scheme of things. They borrow the money to lend to you, this is because we as a nation have £1 trillion of debt! Once they factor in the cost of buying in the funds, add on the cost of arranging the loan, and then the cost of maintaining it, their margins are very tight. If a lot of people default on loan payments of loans at 5.6%, they will lose big money!