If the decoration loan is found by the bank, it will be jailed, which generally constitutes the crime of fraudulent loans. The actor obtains loans, bill acceptance, letters of credit, guarantees, etc. Whoever defrauds a bank or other financial institution of funds, thus causing heavy losses to the bank or other financial institution, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall also or only be fined.
In the name of decoration, the lightest punishment is that the bank requires you to repay all loans in the near future. If you can't return it on time, the problem will be serious, and the bank will sue you for fraudulent loans. If the bank wins the case, the next step is to ask the court to force repayment, and your assets are likely to be auctioned.
If fraudulent loans are involved, the bank has the right to require the applicant to repay all the arrears in one lump sum, including but not limited to the principal, handling fee, interest, late payment fee and all other payables.
In other words, if the bank finds that the decoration loan you applied for is not used for decoration, it will think that you are cheating. The consequence of cheating is that the bank requires you to return all the loans in the near future and pull you into the blacklist of the banking system. It will be difficult to borrow money from the bank in the future.
If you don't repay within the mandatory prepayment period stipulated by the bank, you will also have to bear penalty interest and late fees. If the deadline is seriously exceeded, the bank may also sue you in court. After winning the case, you can submit an application to the court to enforce the judgment, and your car and house may be auctioned.
After the ordinary decoration loan application is successful, the bank will issue a bank card to the borrower. The card has no cash withdrawal function and can only be used on POS machines of specific merchants. The simple process of drawing decoration loan is to find the POS machine of the decoration company to swipe the card. After the funds are paid to the account of the decoration company, the decoration company will transfer them to the borrower's account.
The cash outflow of decoration loan is the so-called loan fund withdrawal. Banks can find that the borrower's loan capital flow is abnormal and will judge it as withdrawing funds. The usual practice is to ask the borrower to repay the principal of the remaining loan in one lump sum before a certain day, usually within one month. It is usually difficult for borrowers to repay the principal of all renovation loans within one month. In order to solve this problem, borrowers usually borrow new debts to pay off old debts. The interest rate of new loans is relatively high and the pass rate is uncertain. Carelessness may lead to bankruptcy.
I hope the above content can help you. If in doubt, please consult a professional lawyer.
Legal basis: Article 175-1 of the Criminal Law of People's Republic of China (PRC): Crime of defrauding loans, bill acceptance and financial bills. Whoever defrauds a bank or other financial institution of loans, acceptance bills, letters of credit or guarantees, thus causing heavy losses to the bank or other financial institution or having other serious circumstances, shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall also, or shall only, be fined; Whoever causes particularly heavy losses to banks or other financial institutions or has other particularly serious circumstances shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years and shall also be fined.