Yes - the bank may limit the loan purpose or set a different interest rate based on the loan purpose. The bank may have its own loan policy.
The bank however may not limit the use of the loan based on the discriminatory reason - e.g., sex, age, race, religion, family status, national origin, military status, disability, etc
The bank may deny the loan based on the purpose or any other reason (unless that is a discriminatory reason).
The bank may dictate the purpose of the loan at the time you sign the loan agreement. As you both signed - you both should agree on the loan terms.
After the agreement is signed - the bank may not change the agreement and put any additional limitation how the loan should be used. If the bank do so - that would be a breach of the contract agreement.
Retired
Taxes, Immigration, Labor law