Loan (electronic IOU credit loan) is simply understood as borrowing money with interest.
Loan is a form of credit activity in which banks or other financial institutions lend monetary funds at a certain interest rate and must return them. Loans in a broad sense refer to loans, discounts, overdrafts and other borrowing funds. Banks put concentrated money and monetary funds out through loans, which can meet the needs of social expansion and reproduction and promote economic development. At the same time, banks can also obtain loan interest income and increase their own accumulation.
Helping a friend to borrow money is a loan model that applies for a loan from a loan platform in the name of an individual, lends money to a friend, and the friend transfers it to the party for repayment in stages. This model is generally based on the trust with friends or relatives, and the two sides reach an oral agreement or sign a simple debit note to help friends borrow money. This model is generally risky. If a friend or relative stops paying the loan halfway, then as a lender, you need to advance the loan yourself.
A secured loan is a loan issued on the condition that a third party provides the corresponding guarantee for the borrower, and the third party recognized by the lender shall provide joint liability guarantee. In other words, when the borrower is unable to repay the loan, the third-party guarantor shall bear the repayment responsibility. Although both of them have capital risks, they are different in nature. To help a friend borrow money, whether to borrow money from the bank or to borrow money from yourself.
The risk of helping others with loans is that if your friend can't pay back the money, he needs to bear the responsibility for repayment himself. Don't vouch for others easily
legal ground
Article 37 of the Law of People's Republic of China (PRC) Commercial Bank shall conclude a written contract with the borrower. The contract shall stipulate the type, purpose, amount, interest rate, repayment period, repayment method, liability for breach of contract and other matters that both parties think need to be agreed.