Loan rates are generally linked to the level of risk faced by the lender - i.e. how likely they are to not get the money they have lent back.
The loan provider will charge a much higher %age to those customers who are in greatest danger of not being able to pay - called a "bad debt".
However, it can clearly be argued that this further penalises those who are in the most precarious financial situations. However, it should also act as a disincentive for those people to just spend more money carelessly.
The same applies to credit cards and you will no doubt have seen a number of offers of 29.9%. Whilst these are ludicrously expensive for most of us and should be avoided, they do represent a good way for someone with a badly damaged credit rating to repair their score. The important thing to remember in this strategy, of course, is to pay the balance IN FULL and do so EVERY MONTH as interest is not charged when the balance is cleared monthly.
Paul Carcone