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Giving false info on loan application

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fairy! | 22:03 Wed 22nd Nov 2006 | Business & Finance
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Is it illegal to give false information on a loan application? Eg, say the loan is required for a car when it's actually for something else?

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if the loan was against a property i dont think they could care less but if it was for a car loan i am sure they would want to know what they could claim back if you didnt keep up the repayments?

i dont know if this is true, its just my opinion?
It's illegal - maybe not criminally illegal, but certainly not legal. You are (or could be - it may be that the loan company doesn't care) obtaining money under false pretences.

There is often a clause in the agreement entitling them to demand immediate repayment of the loan if any information given to obtain it is false.
As dzug states this is fraud. However this will not usually be a problem to the lender UNLESS you miss payments. Then they will jump all over you. While you are conducting your account well there is unlikely to be an issue as they are getting paid.
HI Fairy,

As usual most of the ans's above are correct. Just to clarify - it is ILLEGAL to obtain money on false pretences. Most banks if not all have a clause that says in your T&C that you cannot use it for property purchases - because they do something else called a bridging loan (more expensive of course). From a lender's perspective it is not always how the money is going be realised but also the risks and cost involved in doing so. Also if your lender finds out - depending on how going they lending audit is you could end up with an entry on the CIFAS register (worst case scenario) with an immediate demand for a full and final payment. (legally they can do this as there is always a clause as a termination of contract clause). On the other hand there are people who get away with it as well !!!!
** Correction .... "good their...lending audit is....
Worst case scenario - CIFAS report on your credit files and / or criminal proceedings for 'Obtaining a pecuniary advantage' (Application fraud).

Expected scenario: Keep up the payments and nobody will be any the wiser. Miss a few and it is still unlikely to come out that you 'mis-spent' the advance, so long as you maintain contact with the lender.

Best case scenario: Nothing happens whatsoever and you will feel as though you have 'got one over' on the lender!

Good luck

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