topic Re: Acceptable and unacceptable uses of personal loans in General Credit Topics

Acceptable and unacceptable uses of personal loans

SoCalGardener — Fri, 19 Nov 2021 20:04:26 GMT

The other day I logged on to Amex to look for info on personal loans, so I could reply to a question. While I was there, I read something that piqued my interest--and had me scratching my head:

==================

What can I not use my loan funds for?

Personal Loans may not be used for post-secondary education expenses, real estate, business, securities, vehicle purchases (other than as down payment for a vehicle), to pay down balances on American Express-issued Cards or any purpose prohibited by law or not otherwise permitted by these terms and conditions or your Loan Agreement.

==================

My question is, how would they know WHAT you used it for?! If I got a loan and put the money in my BofA checking account, and then went about paying for....whatever....how would they know? Say I used it to buy a car, or to pay tuition, or buy textbooks, I don't get how they can regulate this.

Please clue me in!

Re: Acceptable and unacceptable uses of personal loans

Anonymous — Fri, 19 Nov 2021 20:38:33 GMT

Did you ACH the finds from Amex to BofA? Then they would be able to find out if they really wanted to know what you were spending it on.

My question is, why would they mention paying on Amex Cards when people get loans to pay down CC's all the time? lol

I do understand why you can't BT from one Amex card to another, but using loan funds to pay off a Amex card seems totally reasonable to me.

Vehicle purchase is another odd one, while I wouldn't because APR's are higher on personal loans than auto loans, I'm not sure why they have to include it. TBH they seem to restrictive to me because once you co-mingle that loan with your other finances there's no proof who's Money went to pay for what.

Re: Acceptable and unacceptable uses of personal loans

SouthJamaica — Fri, 19 Nov 2021 20:50:03 GMT

@SoCalGardener wrote:
The other day I logged on to Amex to look for info on personal loans, so I could reply to a question. While I was there, I read something that piqued my interest--and had me scratching my head:

==================
What can I not use my loan funds for?
Personal Loans may not be used for post-secondary education expenses, real estate, business, securities, vehicle purchases (other than as down payment for a vehicle), to pay down balances on American Express-issued Cards or any purpose prohibited by law or not otherwise permitted by these terms and conditions or your Loan Agreement.
==================

My question is, how would they know WHAT you used it for?! If I got a loan and put the money in my BofA checking account, and then went about paying for....whatever....how would they know? Say I used it to buy a car, or to pay tuition, or buy textbooks, I don't get how they can regulate this.

Please clue me in!

In response to your question, they can't possibly know.

The question I have is why do each of these restrictions exist?

Re: Acceptable and unacceptable uses of personal loans

SoCalGardener — Fri, 19 Nov 2021 21:10:52 GMT

@SouthJamaica wrote:
@SoCalGardener wrote:
The other day I logged on to Amex to look for info on personal loans, so I could reply to a question. While I was there, I read something that piqued my interest--and had me scratching my head:

==================
What can I not use my loan funds for?
Personal Loans may not be used for post-secondary education expenses, real estate, business, securities, vehicle purchases (other than as down payment for a vehicle), to pay down balances on American Express-issued Cards or any purpose prohibited by law or not otherwise permitted by these terms and conditions or your Loan Agreement.
==================

My question is, how would they know WHAT you used it for?! If I got a loan and put the money in my BofA checking account, and then went about paying for....whatever....how would they know? Say I used it to buy a car, or to pay tuition, or buy textbooks, I don't get how they can regulate this.

Please clue me in!
In response to your question, they can't possibly know.

The question I have is why do each of these restrictions exist?

Yes! Exactly. Like, HUH?! Why even print those restrictions? They'll never know what you or I do with the loan, so why bother listing those restrictions? I can see if--for legal reasons--they have to state something like "Amex loans cannot be used to hire a hitman" or something like that, but tuition?!

Re: Acceptable and unacceptable uses of personal loans

SoCalGardener — Fri, 19 Nov 2021 21:15:15 GMT

@Anonymous wrote:
Did you ACH the finds from Amex to BofA? Then they would be able to find out if they really wanted to know what you were spending it on.

Really? I don't see how. Just giving them the right to *deposit* money into a bank account doesn't also give them permission to *monitor* that account. Right?

@Anonymous wrote:

My question is, why would they mention paying on Amex Cards when people get loans to pay down CC's all the time? lol
I do understand why you can't BT from one Amex card to another, but using loan funds to pay off a Amex card seems totally reasonable to me.
Vehicle purchase is another odd one, while I wouldn't because APR's are higher on personal loans than auto loans, I'm not sure why they have to include it. TBH they seem to restrictive to me because once you co-mingle that loan with your other finances there's no proof who's Money went to pay for what.

Exactly. *SMH*

Re: Acceptable and unacceptable uses of personal loans

SouthJamaica — Fri, 19 Nov 2021 22:01:53 GMT

@SoCalGardener wrote:
@SouthJamaica wrote:
@SoCalGardener wrote:
The other day I logged on to Amex to look for info on personal loans, so I could reply to a question. While I was there, I read something that piqued my interest--and had me scratching my head:

==================
What can I not use my loan funds for?
Personal Loans may not be used for post-secondary education expenses, real estate, business, securities, vehicle purchases (other than as down payment for a vehicle), to pay down balances on American Express-issued Cards or any purpose prohibited by law or not otherwise permitted by these terms and conditions or your Loan Agreement.
==================

My question is, how would they know WHAT you used it for?! If I got a loan and put the money in my BofA checking account, and then went about paying for....whatever....how would they know? Say I used it to buy a car, or to pay tuition, or buy textbooks, I don't get how they can regulate this.

Please clue me in!
In response to your question, they can't possibly know.

The question I have is why do each of these restrictions exist?
Yes! Exactly. Like, HUH?! Why even print those restrictions? They'll never know what you or I do with the loan, so why bother listing those restrictions? I can see if--for legal reasons--they have to state something like "Amex loans cannot be used to hire a hitman" or something like that, but tuition?!

I'm sure it's got to do with some federal regulations under which they're operating, but I can't imagine what the rationale is behind them.

Re: Acceptable and unacceptable uses of personal loans

SoCalGardener — Fri, 19 Nov 2021 22:28:19 GMT

@SouthJamaica wrote:
I'm sure it's got to do with some federal regulations under which they're operating, but I can't imagine what the rationale is behind them.

You and me both!

Re: Acceptable and unacceptable uses of personal loans

Yasselife — Fri, 19 Nov 2021 22:56:34 GMT

@SoCalGardener

Perhaps it is a way to protect themselves in Court, in case the client does not make the payments and they demand to question the use of the loan. If it is there it is because it has a relevant reason, I would not doubt that there have been cases where people use the loan to buy cars; the credit must have met the requirements at the time of approval but situations can suddenly change for anyone.

Re: Acceptable and unacceptable uses of personal loans

SoCalGardener — Fri, 19 Nov 2021 23:04:15 GMT

@Yasselife wrote:
@SoCalGardener
Perhaps it is a way to protect themselves in Court, in case the client does not make the payments and they demand to question the use of the loan. If it is there it is because it has a relevant reason, I would not doubt that there have been cases where people use the loan to buy cars; the credit must have met the requirements at the time of approval but situations can suddenly change for anyone.

Yeah, I see what you're saying, but I disagree for one simple reason: once the money is in my (or your) hands, Amex cannot POSSIBLY know what funds we used to purchase [a car] [tuition] [whatever]. I mean, once the money is in my account, as someone said upthread, it's co-mingled with other money! How can anyone say with certainty, "THAT $X amount came from this loan and was used to buy a car!" They can't. Once it's in my bank account, and mixed with existing and additional funds, no one can say for sure how the money was used. So while the court theory is a good one, I don't think it would ever hold up as there's just no way to prove it.

Re: Acceptable and unacceptable uses of personal loans

FinStar — Sat, 20 Nov 2021 01:57:19 GMT

@SoCalGardener wrote:
@Yasselife wrote:
@SoCalGardener
Perhaps it is a way to protect themselves in Court, in case the client does not make the payments and they demand to question the use of the loan. If it is there it is because it has a relevant reason, I would not doubt that there have been cases where people use the loan to buy cars; the credit must have met the requirements at the time of approval but situations can suddenly change for anyone.
Yeah, I see what you're saying, but I disagree for one simple reason: once the money is in my (or your) hands, Amex cannot POSSIBLY know what funds we used to purchase [a car] [tuition] [whatever]. I mean, once the money is in my account, as someone said upthread, it's co-mingled with other money! How can anyone say with certainty, "THAT $X amount came from this loan and was used to buy a car!" They can't. Once it's in my bank account, and mixed with existing and additional funds, no one can say for sure how the money was used. So while the court theory is a good one, I don't think it would ever hold up as there's just no way to prove it.

You may be surprised the information they can obtain. In the ordinary course of business, probably not an issue for most individuals, but they have that legalese clause for a reason. When folks have committed fraud, such as defaulting on credit obligations or filing for BK, they're able to trace how funds were used if transactions or activities are deemed suspect.

You may think "they're commingled with other money...no one can say for sure how the money was used.", they can find out forensically if they obtain a subpoena for any financial records -- if it gets to be an extreme case of defrauding creditors or willful concealment of activities. It has happened.

Also, hopefully you're familiar with EWS, just about every major bank has access to it and they can see pretty much what goes on with your deposit accounts, especially for banks that are part of the EWS consortium.

Re: Acceptable and unacceptable uses of personal loans

Anonymous — Sat, 20 Nov 2021 21:15:21 GMT

@FinStar wrote:
Also, hopefully you're familiar with EWS, just about every major bank has access to it and they can see pretty much what goes on with your deposit accounts, especially for banks that are part of the EWS consortium.

I know they must look at mine and wonder, as I can move funds around somewhat erratically to the simplistic mind. But when your DD is set up in a Bank that charges for transfers out, you have to pull from another who doesn't, then once there you have to push said funds into another account that also charges for transfers. lol So when all said and done I've moved funds 3-4 times in a two week span, and that's on top of the percentage I also send to Schwab to invest as well as my HYSA.

And don't even get me started on opening accounts for bank bonuses.

Re: Acceptable and unacceptable uses of personal loans

SoCalGardener — Sun, 21 Nov 2021 01:01:06 GMT

@FinStar wrote:
@SoCalGardener wrote:
Yeah, I see what you're saying, but I disagree for one simple reason: once the money is in my (or your) hands, Amex cannot POSSIBLY know what funds we used to purchase [a car] [tuition] [whatever]. I mean, once the money is in my account, as someone said upthread, it's co-mingled with other money! How can anyone say with certainty, "THAT $X amount came from this loan and was used to buy a car!" They can't. Once it's in my bank account, and mixed with existing and additional funds, no one can say for sure how the money was used. So while the court theory is a good one, I don't think it would ever hold up as there's just no way to prove it.
You may be surprised the information they can obtain. In the ordinary course of business, probably not an issue for most individuals, but they have that legalese clause for a reason. When folks have committed fraud, such as defaulting on credit obligations or filing for BK, they're able to trace how funds were used if transactions or activities are deemed suspect.

You may think "they're commingled with other money...no one can say for sure how the money was used.", they can find out forensically if they obtain a subpoena for any financial records -- if it gets to be an extreme case of defrauding creditors or willful concealment of activities. It has happened.

Also, hopefully you're familiar with EWS, just about every major bank has access to it and they can see pretty much what goes on with your deposit accounts, especially for banks that are part of the EWS consortium.

Actually, I've never heard of EWS--until right now! So I read up on it. Turns out BofA was one of its creators. Luckily, I don't do anything interesting enough to warrant EWS or anyone else poking around in my business--or me needing to worry that they are.

I realize we can volley this back and forth all day; I'm not trying to be argumentative, but I'll just reiterate that IN MY OPINION, once money is mixed in with other money in my bank account, no one can say for sure which money was used for which purpose(s). Sure, there can be circumstantial evidence, like depositing a $10,000 loan on Monday and writing a check on Tuesday for $10,000 to buy a car. But the only way I see that being usable is if there were NO OTHER funds in the account! If I had $0 and added $X from a loan, then immediately spent $X on something illegal, it would look very straightforward, very cut and dry that I used the loan illegally. But I watched "Judge Judy" for many years, and one thing I gleaned from her is that FACTS are one thing, how something LOOKS is another.

Now, with my brand-new EWS knowledge, in addition to what I already knew, i.e., how BofA could easily produce records of all my transactions, money in and money out, their dates, their sources, their destinations, etc., I still think it would be a tough case to *prove* in court. Assume that I have $25,000 in my checking account, and I add $10,000 from an Amex loan. In the weeks that follow I pay tuition, buy textbooks, go to my favorite casino, stay at its hotel, pay my electric bill and buy a car from my neighbor--who on earth knows what part of the loan got used for what?! it's not like actual pieces of currency that are marked and can be tracked. If I received the loan in the form of ten $1,000 bills, and they were all marked, and then I spent the money on something I shouldn't have, duh! I'm busted. But in a CHECKING ACCOUNT? I'm just not seeing it. Logistically. I don't see how it's possible. I am, however, very open to being educated.

Re: Acceptable and unacceptable uses of personal loans

Yasselife — Sun, 21 Nov 2021 13:54:06 GMT

@SoCalGardener

Logistically doesn't make sense to "us" because of the limited information we have, but as Fin Star said, almost everything can be found; not a good idea to go around that, There is a way however but I don't want to go against TOS or even worse, give ideas to members on how to do something that is wrong/bad.

In conclusion, I assure you that the terms are there for good reason, everything said occupies a space for a specific purpose, designed by a lawyer that Amex paid for. *don't poke the bear."

Re: Acceptable and unacceptable uses of personal loans

4sallypat — Sun, 21 Nov 2021 14:54:59 GMT

@SoCalGardener wrote:
......
What can I not use my loan funds for?
Personal Loans may not be used for post-secondary education expenses, real estate, business, securities, vehicle purchases (other than as down payment for a vehicle), to pay down balances on American Express-issued Cards or any purpose prohibited by law or not otherwise permitted by these terms and conditions or your Loan Agreement.
==================

My question is, how would they know WHAT you used it for?! If I got a loan and put the money in my BofA checking account, and then went about paying for....whatever....how would they know? Say I used it to buy a car, or to pay tuition, or buy textbooks, I don't get how they can regulate this.

Please clue me in!

Does securities include buying crypto currency ???

Re: Acceptable and unacceptable uses of personal loans

SoCalGardener — Sun, 21 Nov 2021 18:53:54 GMT

@Yasselife wrote:
@SoCalGardener
Logistically doesn't make sense to "us" because of the limited information we have, but as Fin Star said, almost everything can be found; not a good idea to go around that, There is a way however but I don't want to go against TOS or even worse, give ideas to members on how to do something that is wrong/bad.
In conclusion, I assure you that the terms are there for good reason, everything said occupies a space for a specific purpose, designed by a lawyer that Amex paid for. *don't poke the bear."

You're probably right. It doesn't make sense to add a bunch of verbiage--dictated by an expensive attorney--if it serves no purpose. Oh well, as I've said, I don't do anything interesting enough to warrant anyone snooping in my business--and if they already are (I assume they are, based on what I now know), there's nothing there to get alarmed about!

Re: Acceptable and unacceptable uses of personal loans

FinStar — Sun, 21 Nov 2021 19:14:26 GMT

@4sallypat wrote:
@SoCalGardener wrote:
......
What can I not use my loan funds for?
Personal Loans may not be used for post-secondary education expenses, real estate, business, securities, vehicle purchases (other than as down payment for a vehicle), to pay down balances on American Express-issued Cards or any purpose prohibited by law or not otherwise permitted by these terms and conditions or your Loan Agreement.
==================

My question is, how would they know WHAT you used it for?! If I got a loan and put the money in my BofA checking account, and then went about paying for....whatever....how would they know? Say I used it to buy a car, or to pay tuition, or buy textbooks, I don't get how they can regulate this.

Please clue me in!
Does securities include buying crypto currency ???

Feel free to test the waters and let us know if anything comes out of that😉 Guinea pigs welcome.

Re: Acceptable and unacceptable uses of personal loans

jasonbourne84 — Sun, 21 Nov 2021 22:07:07 GMT

Various international, federal, state, and local laws together with non-legal requirements/agreements established by and between private entities collectively create a patchwork of rules and regulation that are meant to protect governments, borrowers, lenders, sellers, purchasers, manufacturers, and -- ideally -- society as a whole.

Some of those rules/regulations are purely designed to discourage and/or prohibit certain conduct. Some are designed both to discourage/prohibit certain conduct and to encourage/require other conduct.

For example, it's not hard to imagine why the finance industry (along with others) would want to ensure that lending obtained for the purpose of purchasing big ticket items that are customarily collateralized are properly so.

Re: Acceptable and unacceptable uses of personal loans

dragontears — Tue, 23 Nov 2021 17:34:38 GMT

@SoCalGardener wrote:
The other day I logged on to Amex to look for info on personal loans, so I could reply to a question. While I was there, I read something that piqued my interest--and had me scratching my head:

==================
What can I not use my loan funds for?
Personal Loans may not be used for post-secondary education expenses, real estate, business, securities, vehicle purchases (other than as down payment for a vehicle), to pay down balances on American Express-issued Cards or any purpose prohibited by law or not otherwise permitted by these terms and conditions or your Loan Agreement.
==================

My question is, how would they know WHAT you used it for?! If I got a loan and put the money in my BofA checking account, and then went about paying for....whatever....how would they know? Say I used it to buy a car, or to pay tuition, or buy textbooks, I don't get how they can regulate this.

Please clue me in!

It is a CYA move. Amex most likely doesn't care what you do with the funds; however, some lending is HIGHLY regulated (such as mortgage lending) and unless a lender is approved to lend in those areas they must state that the funds can't be used for those purposes.

Re: Acceptable and unacceptable uses of personal loans

cocoahoe — Tue, 08 Nov 2022 04:47:37 GMT

@Anonymous wrote:
Did you ACH the finds from Amex to BofA? Then they would be able to find out if they really wanted to know what you were spending it on.
five nights at freddy's
My question is, why would they mention paying on Amex Cards when people get loans to pay down CC's all the time? lol
I do understand why you can't BT from one Amex card to another, but using loan funds to pay off a Amex card seems totally reasonable to me.
Vehicle purchase is another odd one, while I wouldn't because APR's are higher on personal loans than auto loans, I'm not sure why they have to include it. TBH they seem to restrictive to me because once you co-mingle that loan with your other finances there's no proof who's Money went to pay for what.

Thank you; I appreciate it!