According to the provisions of Article 394 of the Civil Law of People's Republic of China (PRC), if the debtor or a third party mortgages the property to the creditor without transferring the property to guarantee the performance of the debt, the debtor fails to perform the due debt or the creditor has the right to be paid in priority for the property. The debtor or the third party specified in the preceding paragraph is the mortgagor, the creditor is the mortgagee, and the property that provides guarantee is the mortgaged property.
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Interim Measures for the Administration of Personal Loans Article 26 Lenders shall standardize the guarantee process and operation in accordance with the relevant provisions of People's Republic of China (PRC) Property Law, People's Republic of China (PRC) Guarantee Law and other laws and regulations. The Lender shall participate in the mortgage registration according to this Contract. If the lender entrusts a third party to handle the matter, it shall verify the registration of the collateral. For personal loans secured by way of guarantee, the lender shall be filled out by at least two loan officers.
Twenty-seventh lenders should strengthen the management of loan issuance, follow the principle of separation of examination and loan, and set up an independent loan management department or post to be responsible for implementing the loan conditions and issuing personal loans that meet the agreed conditions.
China Government Network-People's Republic of China (PRC) Civil Code