In terms of a private loan between two private individuals, are there any limitations to what credit receiver (lender) can use the borrowed money for ? Extreme examples might be buying food, paying rent, investing / trading borrowed funds on the stock exchange, buy a car or even gamble ? - this is obviously given that the lender fully complies fully to the terms of the formal loan agreement, in terms of interest, payment period and value, etc ?

2 Answers 2


When you borrow from a bank, there are secured loans, as with a mortgage, or unsecured lines of credit, usually a more reasonable amount of money, but also based on income.

You just asked about a private loan. It depends on the person and your relationship. If you need money to pay the rent, you might not be the best person to lend money to. If you ask a friend or relative, they may lend you money without asking its purpose.


Some banks do and some don't.

If it's a personal loan, the word "personal" is in play here. You do not have to divulge your reason for a personal loan. If the bank insists on a reason, you can be honest and state what the purpose of the loan is as long as it's for a legal thing.

Tell the truth.

It's as simple as that.

  • 1
    Sadly this question isn't about bank loans, but about a loan from one person to another :(
    – Qsigma
    Jul 23, 2020 at 16:55
  • oh okay! I thought it was related to a personal loan. My bad Sep 8, 2020 at 10:18

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