1. When signing a guarantee contract, it is best to agree with the other party that the guarantee type is general guarantee, so that the creditor can refuse to undertake the guarantee responsibility before the main contract dispute has been tried or arbitrated and the borrower's property cannot be enforced according to law. In the case of joint and several liability guarantee, the creditor may require the borrower to perform the debt, or require the guarantor to bear the guarantee liability within the scope of its guarantee, and the guarantor has no right to defend first.

Be sure to confirm your friend's credit. The better your friend's credit, the less risk you have. Otherwise, the other party borrowed money and ran away directly, and had to pay it back himself. Moreover, if the other party is overdue, there will be bad information in his credit report, which will lead to credit damage and affect his subsequent loan.

You must ensure that you have a stable economic income and sufficient repayment ability before agreeing to the guarantee. Otherwise, helping others to guarantee will increase personal financial burden.

4. Understand the borrower's repayment ability. The income level of the borrower is an important factor to determine whether the arrears can be paid off.

5. Investigate whether the borrower has other debts. Some borrowers have a good reputation, but when the debt crisis breaks out and they are unable to repay, their reputation will not be exchanged for money. Therefore, it is not recommended to guarantee the responsible borrower.

What are the big risks of guaranteeing loans for others?

1. If the borrower fails to repay within the time limit or "runs away", the guarantor will repay it on his behalf.

Having said that, I would like to mention that when signing a loan guarantee contract, the guarantor has general liability and joint liability. When the borrower fails to repay the loan on time, the contract becomes effective, and the guarantor must repay the loan according to the repayment procedure agreed with the bank. In other words, you didn't lend the loan, and now you are paying it back. This is to bear legal responsibility.

2. Affect the guarantor's credit record

As we all know, banks attach great importance to the borrower's credit information and the factors that directly affect your loan, such as the amount, term and interest rate. It will also be written into the computer as your credit record for permanent preservation when you help others to make loan guarantees and repay loans.