Loan - change of circumstances

JohnEdward888

Hi folks,

Looking for some guidance. Won't bore you with exact figures.

I took out a personal loan out about 6 months ago to complete a loft conversion. Unfortunately our circumstances recently changed which means we aren't doing the loft conversion anymore as we need to sell the house to be closer to family members elsewhere.

My question is, because we stated the loan was for a loft conversion, are we able to use the money for another purpose? Do we have to contact the bank for their permission? We don't want to fall foul of anything.

Thanks in advance for any guidance offered.

[Deleted User]

You took the loan out in good faith (which you can presumably give evidence for such as quotes) - if you don't need the conversion then you can either pay the loan back or keep paying it monthly, the bank are highly unlikely to care if it was a standard personal loan so long as you keep up payments. 

DCFC79

JohnEdward888 said:

Hi folks,

Looking for some guidance. Won't bore you with exact figures.

I took out a personal loan out about 6 months ago to complete a loft conversion. Unfortunately our circumstances recently changed which means we aren't doing the loft conversion anymore as we need to sell the house to be closer to family members elsewhere.

My question is, because we stated the loan was for a loft conversion, are we able to use the money for another purpose? Do we have to contact the bank for their permission? We don't want to fall foul of anything.

Thanks in advance for any guidance offered.

The fact you stated it was for a loft conversion and now it idnt happening isnt an issue, the banks/lenders understand the borrowers situation does change so as far ss I can see there shouldnt be an issue.
Depends what you were thinking of using it for.

Brie

I can't imagine any bank coming around to check that you used the ££ for a loft conversion or to put in a swimming pool or buy a new car or have a holiday.  If they are being paid they won't care.

ThisnotThat

Brie said:

I can't imagine any bank coming around to check that you used the ££ for a loft conversion or to put in a swimming pool or buy a new car or have a holiday.  If they are being paid they won't care.

Not particularly good advice.

They do care what you are spending the money on, hence asking what the purpose of the loan is.  Perhaps the likelihood of them coming to check is very low, but that doesn't mean you should lie on the application form.

However, as has been stated, as long as the OP was truthful in their application, them using it for another purpose is not going to be an issue.

JohnEdward888

ThisnotThat said:

Brie said:

I can't imagine any bank coming around to check that you used the ££ for a loft conversion or to put in a swimming pool or buy a new car or have a holiday.  If they are being paid they won't care.

Not particularly good advice.

They do care what you are spending the money on, hence asking what the purpose of the loan is.  Perhaps the likelihood of them coming to check is very low, but that doesn't mean you should lie on the application form.

However, as has been stated, as long as the OP was truthful in their application, them using it for another purpose is not going to be an issue.

Thanks for all the advice folks. The reality is we've no idea as yet what to spend it on. I was just looking to clarify if we should speak to the bank about it in case there were any definite no nos or if it now doesn't matter as long as we make the payments and have acted in good faith.

macman

Or you could just do early repayment and avoid years of interest payments on the loan?