Reason for loan

Leon79

Asking on behalf of a friend. If someone took out some loans and said they were for a car, doing up a house or whatever, but spent the money on other things, then a while later took out a new loan to consolidate the first loans (which are paid off in full)... If they then have trouble making the repayments towards the new loan, is the fact the original money was not spent as expected a problem?

I say no because the old loans were settled so it doesn't matter how the money was spent, and the new loan was indeed to consolidate debt, so all hunky dory. In reality do banks really take action where the money is spent on something other than was in the application?

foxy-stoat

How could bank number 1 who lent money to someone who then later repaid the loan in full from bank 2 take action against the borrower?


Is the borrower looking to blame bank number 1 in agreeing to lend them money they later repaid or bank number 2 who agreed to lend them money to repay bank number 1?


I suggest the borrower needs to stop taking out loans and seriously look at their spending.

Leon79

foxy-stoat wrote: »

How could bank number 1 who lent money to someone who then later repaid the loan in full from bank 2 take action against the borrower?


Is the borrower looking to blame bank number 1 in agreeing to lend them money they later repaid or bank number 2 who agreed to lend them money to repay bank number 1?


I suggest the borrower needs to stop taking out loans and seriously look at their spending.

Thanks for the advice.... but I don't recall saying the person is still taking out loans and can assure you they are looking at their spending but that's not what my post was about.

They are not looking for someone to blame (jeez.. calm down dear!). They are worried whether, by paying off the first loans, any potential fraud element has been neutralised.

Shakin_Steve

I doubt you could stretch it to fraud. Banks very seldom visit to check on your renovations.:D

Shakin_Steve

I'll give you an example: Banks used to omit 'car' from the drop down list as car loans were offered under different terms. They may still do, as far as I know. I've picked 'home improvement ' at least twice when I wanted the money to buy a car but, if I'd defaulted, they wouldn't have sent a builder round to check.

foxy-stoat

Leon79 wrote: »

Thanks for the advice.... but I don't recall saying the person is still taking out loans and can assure you they are looking at their spending but that's not what my post was about.

They are not looking for someone to blame (jeez.. calm down dear!). They are worried whether, by paying off the first loans, any potential fraud element has been neutralised.

My apologises, I see a lot of treads on here about folk who take out loans, spend the money then look to get out of repaying the debts due to not signed an application, lender missing out a letter from their name....not spending the money on the intended purpose could of been another avenue!


I wish your friend all the luck

Leon79

Thank you