1. The guarantee institution guarantees to pay the outstanding principal and interest of the borrower when the borrower fails to repay the principal and interest within the time limit stipulated in the loan contract;

2. The loan guarantee contract takes effect when the borrower receives the loan, and becomes invalid after the borrower or guarantor repays the principal and interest. Loan guarantee is the main business of credit guarantee institutions. Its main purpose is to alleviate the financing difficulties of enterprises, disperse the risks that may arise from bank lending and enterprise financing, and play a role in ensuring the safety of credit loans and promoting the development of enterprises.

What are the requirements of the loan guarantor?

1. Legal persons, other organizations or citizens who have the ability to pay off debts on their behalf may serve as guarantors;

2. State organs shall not act as guarantors, except those who use loans from foreign governments or international economic organizations with the approval of the State Council;

3, schools, kindergartens, hospitals and other public institutions and social organizations for the purpose of public welfare shall not become guarantors;

4. Branches and functional departments of an enterprise as a legal person shall not act as guarantors. If the branch of an enterprise as a legal person has written authorization from the legal person, it may provide guarantee within the scope of authorization;

5. No unit or individual may force banks and other financial institutions or enterprises to provide guarantees for others. Banks and other financial institutions or enterprises have the right to refuse to force them to provide guarantees for others.

Legal basis: Article 15 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases.

The plaintiff only brought a private lending lawsuit on the basis of creditor's rights certificates such as IOUs, receipts and IOUs. If the defendant argues that the loan has been repaid, the defendant shall prove his claim with evidence. After the defendant provides corresponding evidence to prove his claim, the plaintiff should still bear the burden of proof for the existence of the loan relationship.

If the defendant's defense loan behavior has not actually occurred and can make a reasonable explanation, the people's court shall comprehensively judge and verify whether the loan fact has occurred by combining the facts and factors such as the amount of loan, the delivery of money, the economic ability of the parties, the local or inter-party transaction methods, trading habits, the changes in the property of the parties, witness testimony, etc.