Write a clear loan agreement when lending money; think carefully before agreeing to be a guarantor
The loan agreement must include all key details: who the lender and borrower are, the amount, interest rate, term, and repayment method, plus both signatures. Always use bank transfers instead of cash — this makes it much easier to pursue legal action if needed. Before agreeing to be a guarantor, check whether the contract mentions “joint and several liability.” Under a standard guarantee, creditors must first sue the borrower and exhaust all collection efforts before they can demand repayment from you. But if you sign a joint and several liability guarantee, creditors can demand payment from you directly.
There is no cost involved. Simply use a piece of paper to…
Loan contracts must be in writing, with standard clauses covering the type of loan, currency, intended use, am…
There is no cost involved. Simply use a piece of paper to list the lender, borrower, amount, interest rate, term, and repayment method, then have both parties sign it. Transfer the money electronically to leave a paper trail; never hand over cash.
Loan contracts must be in writing, with standard clauses covering the type of loan, currency, intended use, amount, interest rate, term, and repayment method. This clarity is essential for any future legal action. If a guarantee contract does not explicitly state the type of guarantee or leaves details ambiguous, it is treated as a standard guarantee. Under such terms, creditors must first pursue legal action against the borrower and attempt to enforce repayment before they can turn to you. However, if you agree to a joint and several liability guarantee, you lose this protection — creditors can demand payment from you immediately. (Nationwide)
全国人大 (2020). 民法典（第六百六十八、六百八十一、六百八十六、六百八十七条）. https://www.spp.gov.cn/spp/fl/202006/t20200602_463888.shtml
Open source linkAny interest charged above four times the LPR is not legally enforceable; see Section 7 for details. It is advisable to include the borrower’s ID number and label the document as a “loan agreement.” Whether or not the guarantee contract contains the phrase “joint and several liability” determines whether you are secondary to the borrower or equally liable — be sure to review this before signing. If they said you would be a guarantor but the paper you signed is a loan contract, see item 45 (you are the borrower, not the guarantor).