Depending on the nature of the contract, it can be paid off by a third party. If the debt as the content of the contractual relationship is exclusive, it is not allowed to pay off on its behalf in nature. It is generally believed that debts cannot be paid off on their behalf because of their nature: debts that are not regarded as debts, debts based on the debtor's own special skills and technology, debts arising from the special trust relationship between creditors and debtors, etc.
The borrower's credit report shows compensation, indicating that his previous loan was in cooperation with the insurance company. When the borrower borrows money, the insurance company provides guarantee for the borrower's debt. Once the borrower is overdue for more than 80 days and enters the payment stage, the lending institution will make a claim to the insurance company, and the insurance will pay the borrower's debt and report it to the credit bureau.
In this way, the creditor of the borrower has changed from a lending institution to an insurance company. However, because the insurance company repaid the debt on behalf of the borrower, the borrower needs to return all the money including the penalty interest, principal and loan interest to the insurance company, so as to truly be debt-free and recover the credit investigation.
In short, it should be noted that credit reporting also has a process of compensation and settlement. Generally, the insurance company applies to the credit information center to modify the credit information, and then modifies the compensation on the borrower's credit information as overdue. However, although there is no compensation record, it will take five years for overdue records to be completely cleaned up. This date is calculated from the date of debt settlement.
I hope the above content can help you. If in doubt, please consult a professional lawyer.
Legal basis:
Article 667 of the Civil Code of People's Republic of China (PRC)
A loan contract is a contract in which the borrower borrows money from the lender, repays the loan at maturity and pays interest.
Article 67 1
If the lender fails to provide the loan according to the agreed date and amount, thus causing losses to the borrower, it shall compensate for the losses. If the borrower fails to collect the loan according to the agreed date and amount, it shall pay interest according to the agreed date and amount.