This is a story from my dad.
During a recession he applied for a small personal loan for a few thousand dollars from his bank. He had excellent credit, was a homeowner, stable job, yadda yadda. His loan approval should’ve sailed through easily.
But because of the recession, the bank was trying to be extra careful about loaning out money. A loan officer called him to review his paperwork, and asked him what he was going to spend the loan on.
Dad was pissed. He said it’s a PERSONAL loan, and it’s none of their business what he’s going to do with it. It’s personal.
The bank dude was really nice, he explained the situation and said he’s just doing his job. He had to fill out paperwork, one of the spaces required that he writes what dad was going to do with the money.
Dad said, “Ok, when I get the money, I’m going to take it all out of the bank in cash, go home, open my window and throw it all outside.”
He found out a few days later he was approved for the loan.
I hate that they have to ask that too, but my understanding is the legal reasoning is to try and weed out money launderers or some shit like that.
As an aside, let me just encourage everyone here to use credit unions. I needed a very small loan once, only $500, to send to a sibling in another state who had lost his job and just needed short-term help. They wouldn’t approve the $500, but I was told they would approve $4000, which infuriated me as it was clearly a predatory tactic.
So I switched to a CU. My CU even taught me how to avoid overdraft fees in case I ever make a mistake. (Keep a line of credit open, that way if I accidentally overdraft the money would come from that and no fees.) I love banking with them.
Also, I actually make interest money with my credit union savings account. A few bucks a month isn’t a ton, but it’s a few bucks a month more than I ever got from Wells Fargo.
Nice!
I have my investments spread a bit between oil, crypto, and VTI (an ETF). I’ve been lucky. The oil stock I bought at bargain prices in March 2020 paid off my student loans and my down payment on my condo.
I would have said I was going to dump it all on my bed then roll around with it while stark naked.
Uh… it’s ok sir, you can just keep the money.
Stonks.
I used to frequently transfer money between two countries, the process of which required talking to a human at the time. During one such conversation, the Customer Service Representative asked a new question: “What’s the purpose of the transfer?” This immediately took me aback, partly because I didn’t expect the question and partly because, much like your father, it’s none of their fucking business.
After stumbling a bit, I learned the magic phrase “personal use”. After that, every transfer I initiated was for “personal use” until such time as the bank automated the process and I no longer needed to speak to a human to transfer the money across an international border.
I have no earthly idea why “personal use” is acceptable, since it conveys no more useful information than writing nothing, but then it’s not my policy and I don’t care.
Inspiring haha.
I wonder what influence the stated reason had (if any) on the approval. What did he use it on?
Glad you asked.
Short answer: gambling
Long answer: us kids were starting high school and he knew college was after that, so he needed to figure out how to come up with some money to help us. He was good at math, so someone suggested he play the stock market.
He started off investing “fake” money (just his own personal ledger) and did pretty good. So he invested small amounts and continued to do well. He finally decided to borrow money from the bank, which is how the story came about.
He actually did REALLY well; paid off the loan, got a bigger one, paid that off, etc, until he had enough of his own money to keep investing. He beat the S&P every year, he had a talent for it.
But he really didn’t enjoy it, he said it was a lot of work to keep up with the markets and how they interacted with each other. He kept it up for a few years after we finished college until he had a comfortable nest egg and quit.
He only paid for half our college, as a matter of principle he wanted us to come up with the other half. I still have loans to pay off but it was a huge help.
Now he hates capitalism and doesn’t do any investing at all. He used to have some safe mutual funds but he’s jaded about the state of the world, he doesn’t want any part of the system.
Reminds me of Brad Pitt’s character in The Big Short.
Inspiring haha.
I wonder what influence the stated reason had (if any) on the approval. What did he use it on?
When I was in my my twenties, a few months into my first full time career job, I felt like I could splurge a little to celebrate. The problem was my credit card was stuck at “college student” limits, basically useless, and my salary was still going toward the basics of setting up my independent life.
My attempt to raise my credit limit was rejected, my attempt at a personal loan was rejected. Maybe they would have anyway, maybe I just needed to wait more, but I regret answering “buy a nice stereo”. It does sound like the epitome of careless spending to buy electronic gadgets beyond your immediate means. Even back then, your answer mattered.
The reason I’m convinced it mattered was replaying my conversation with my credit union in my head years later: it surely seemed like she was politely trying to get me to give a different answer.
