When applying for a loan and the bank ask the question, what are you going to do with the money what is the best answer for them

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    Tell them what you are going to do with the money. – VBCPP Sep 20 '16 at 15:51
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    The best answer is the truth. – Anthony McCloskey Sep 21 '16 at 23:51

A bank is putting money on the line for you when they loan you money, which is not something they have to do. Not telling them what you intend to do with the money they are giving you, when asked, is fraud, which if you are caught will put you into very deep trouble.

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    Er, no, it's not fraud. If you LIE about what you're going to do with it, that's fraud. If they decide to loan you money without asking a reason (eg, a cash advance on a credit card), you're pretty much free to use it any way you want. Downvote, sorry. – user1731 Sep 21 '16 at 16:20
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    The question is asking what they should tell the bank. This implies that the bank has either asked, or may ask. My answer implies that telling them anything other than your actual intent, is fraud. I'm sorry that my phrasing did not come through that way to you, I'll fix that. – Ranma344 Sep 21 '16 at 16:35
  • I'd still say that refusing to answer isn't fraud. It's only fraud if you do answer, and the answer is not accurate. Of course, banks are usually very careful about checking up on this stuff anyway. – user1731 Sep 21 '16 at 17:30
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    It's safe to say that if you refuse to answer, you aren't going to get a loan. No bank is going to hand money to someone just because they asked for it. – Ranma344 Sep 21 '16 at 18:08
  • Well, that's not my point. My point is that refusing to answer is NOT fraud. But also, yes, banks will give you money just because you ask for it. That's what cash advances and signature loans are all about. – user1731 Sep 22 '16 at 0:45

How you answer is actually dependent on when they ask.

If it is early in the process the question/answer is to determine the type of loan you are looking for: Auto loan, home loan, home improvement loans, education loans; all have products that are geared to those uses. In many cases they will use the item you are purchasing as collateral for the loan. In return for this they will offer you a low interest rate, because they know they can protect their money be repossessing the collateral.

For these standard loans they will ask for more specifics before they give a check for the money because they need to know exactly what you are spending the money on, and they will need to file legal paperwork to protect their money.

If it isn't one of those standard loans then you are looking at a loan that is only backed by your signature. That loan could have a high interest rate. They are asking as part of the process of assessing their risk. Unless you are putting a lie on a form, I am not sure being untruthful puts you in jeopardy.

In some cases they don't care. People get lines of credit without knowing exactly what they are going to spend the money on.

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