What's the loan for...?

andthatmakesone

When applying for a loan, how much weight does the "reason for loan" question actually carry?

Are companies known to reject certain reasons ahead of others?

Iwani

I don't know & I'm sure someone will give you a sensible answer shortly but I'm dying to say 'a mega spending spree' one day and see what they say!

(Not that I ever want another loan, but y'know...)

Emmzi

they ask because it affects a reasonable loan period.

eg a holiday loan - 12 months max so you aren't paying off this years when you want one next year

car loan should not exceed expected ownership period of car so 5 years max, 3 years better

home improvements, longer time frame

etc

IWantToBeFree_2

Also, if you are looking for a consolidation loan, they may take into consideration the fact that you are going to be paying off your existing debt and therefore not massively increasing it (although I guess you don't HAVE to pay existing credit back...)

mrcow

Well if you turned around and said that it was going to pay for your ticket so you could immigrate to Thailand, they may think twice about offering you the loan.

It would be silly for them not to ask the question. Just come up with a sensible answer (home improvements, car etc.)

Jo_R_2

When I took out a loan, they asked me what it was for, I stated consolidation. They then asked for specific details of the debts, eg type of debt, who with and amounts involved.

I assumed at the time this was basically for proof that was what I wanted the money for. They processed this before offering me a loan - so I couldn't have fibbed about it:)