<prompt> Human: I applied for a car loan since I was planning on buying a car. I applied for 7000 USD, and gave them the VIN of the car I was planning on buying. However, negotiations with the seller fell through, and I never bought the car. Instead I used it to make repairs on the car I have.Now, When I was at the bank signing the papers, apparently the banker I was with was new. I had asked them what would happen if the deal fell through, and this guy says you can use it for whatever, as long as you pay us back.And because of that, I used it to make car repairs. Fast forward 2 weeks, and the bank calls me up and tells me their closing department at HQ is freaking out because theres no collateral and I was not able to supply a title for the car to put a lien on, and now they cannot close this loan. And since I used the money, I cant give them back the check. Basically the bank just gave me 7000 dollars and I cant pay them back because the deal cant be closed.Now theyre telling me that I need to reapply for an unsecured loan which has a different interest rate slightly higher than the auto loan rate. Im not too worried about a higher interest rate, but what I am worried about is there being 2 loans in my name, with one that I cannot pay back because it never closed. What do I do in this situation?  <response>: Banks are like that - you get loan for a new car, they expect you to buy a car. They will convert your failed car loan into a personal unsecured loan and move forward. It wont be two loans.They do this because if you get a car loan, use it to get a car, and if you default on payments - bank takes car.What you did, they have no collateral to take back if you default, thus higher interest rates on personal loans. 