When applying for a loan, the borrower must indicate the purpose of the loan, and the loan cannot be made if the purpose is not up to standard. After the loan is issued, if it is verified that the funds are not used according to the specified purposes, the lending institution will consider the borrower to be in breach of contract and may require the borrower to repay in advance.
Personal consumption loans and commercial loans cannot use the loan funds for high-risk areas such as real estate investment, stock trading and gambling, and must be earmarked for special purposes. Consumer loans can be used for decoration, tourism, car purchase, durable goods and other consumer areas, while commercial loans are undoubtedly enterprises can invest money in production and operation, project construction or procurement.
In terms of post-loan monetary supervision, the policy of operating loans is a little looser than that of consumer loans. Generally speaking, it is only necessary to check the purchase and sale contracts of enterprises to supervise the use of loans, while consumer loans are not needed. In addition to contracts, most banks also require borrowers to provide invoices for use. It can be seen that if individuals fiddle with loan purposes, they still need to pay for loan purposes with taxes and fees, which is not worth the candle.
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