Document loans clearly and guarantee a debt only if you could accept repaying it yourself
A complete written loan record makes a later claim easier. Before guaranteeing someone’s debt, check whether it is an ordinary guarantee or a joint-and-several guarantee. With an ordinary guarantee, the creditor generally pursues the borrower and enforcement first. With joint-and-several liability, the creditor can demand payment directly from you under the guarantee.
What it takes
A sheet of paper and a few minutes. Name the lender and borrower, amount, interest rate, term, and repayment method, and have both parties sign. Transfer the money electronically so there is a record rather than handing over cash.
What you may gain
The Civil Code provides for written loan contracts, subject to its exceptions, and identifies usual terms: loan type, currency, purpose, amount, interest, duration, and repayment. A guarantee agreement that does not clearly specify its type is treated as an ordinary guarantee. An ordinary guarantor generally has the right to require the creditor first to sue or arbitrate and seek enforcement against the borrower before paying the remaining shortfall, subject to statutory exceptions. A joint-and-several guarantee does not provide that sequence of protection.
Context & considerations
For private lending, interest above four times the applicable one-year LPR is not judicially protected; see chapter 7’s borrowing rules. Adding identity-card numbers and marking a transfer “loan” are practical evidence measures. The words indicating joint-and-several liability determine whether the creditor can pursue you alongside the borrower; read them before signing.
Research & references
National People’s Congress (2020). Civil Code, Articles 668, 681, 686, and 687. https://www.spp.gov.cn/spp/fl/202006/t20200602_463888.shtml.