A loan note between private individuals, also known as a private loan note, is legally valid. As long as it has the name of the creditor, the debtor, the amount of money borrowed, the date of borrowing, in line with the main elements of the loan note, has legal effect. Once a dispute arises, can be used as evidence to the people's court claims, the people's court will be supported by this shirt finger. Debtor or third person to the creditor to a certain property as a guarantee for the settlement of debts legal behavior. The debtor or third person to provide collateral property for the mortgagee; provide collateral property is called collateral; the creditor is the mortgagee, and therefore enjoy the right is called a mortgage, for a kind of security right. After the creation of the mortgage, in the debtor does not fulfill the debt when due, the mortgagee has the right in accordance with the provisions of the law to the collateral discount or the sale price of the collateral priority over other creditors. The collateral can be movable or immovable property, but property whose circulation or enforcement is prohibited by law shall not be used as collateral.
Legal Basis: The People's Republic of China and the National Code Article 395 of the debtor or the third party has the right to dispose of the following properties can be mortgaged:
(1) Buildings and other land attachments;
(1) The debtor or third party is entitled to dispose of the following properties can be mortgaged:
(1) Buildings and other land attachments;
(1) Buildings and other land attachments;
(ii) the right to use land for construction;
(iii) the right to use sea areas;
(iv) production equipment, raw materials, semi-finished products, and products;
(v) buildings, ships, and aircrafts under construction;
(vi) means of transportation;
(vii) other properties not prohibited from being mortgaged by laws or administrative regulations.
The mortgagor may mortgage the properties listed in the preceding paragraph together.
I. Which properties can be mortgaged:
1. Houses and other ground fixations owned by the mortgagor.
2. Machinery, means of transportation and other property owned by the mortgagor.
3. State-owned land use rights, houses and other aboveground fixtures which the mortgagor has the right to dispose of in accordance with the law.
4, the mortgagor has the right to dispose of state-owned machinery, means of transportation and other property in accordance with law.
5. The land use rights of barren mountains, barren ditches, barren hills, barren beaches and other barren lands contracted by the mortgagor in accordance with the law and agreed to be mortgaged by the contracting party.
6. Other properties that can be mortgaged according to law.
Two, which property can not be mortgaged
1, land ownership.
2, arable land, residential land, self-reserved land, self-reserved mountains and other collectively owned land use rights, but Article 34, paragraph 5, and Article 36, paragraph 3, that is, "the township (township), the village enterprises of the land use rights shall not be mortgaged separately. If a building such as a factory building of a township (township) or village enterprise is mortgaged, the land-use right within the area of its occupation shall be mortgaged at the same time".
3, schools, kindergartens, hospitals and other institutions for public welfare, social organizations, educational facilities, medical and health facilities and other public welfare facilities.
4. Property whose ownership or right of use is unknown or disputed.
5. Property that has been seized, detained or supervised in accordance with the law.
6, other property that cannot be mortgaged according to law.