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Yes a bank normally wants to know basically what the purpose of the loan is for. The reason is that the loan may need to be secured or there may be better options available depending what it is for. A business start-up loan may be eligible for commercial rates and you may be able to get more money at a lower rate if the loan is secured.
A third party lender will not ask as they do not care. You will pay more interest but they are much more flexible than a bank.
Also, keep in mind that when you use a co-signer the loan is in their name, not yours. If you are trying to rebuild credit it is better to pay more interest and get the loan in your name from a third party lender than to use a co-signer.
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