Bava Metzia 71B

ערב למאן? אילימא ערב לישראל, והא תנא: אלו עוברין בלא תעשה המלוה והלוה, הערב והעדים!

The Talmud asks: You may become a guarantor for whom? If we say it means a guarantor for a Jew who lends money to another Jew with interest, that is difficult. But this would be contradicted by that which A baraita states in a Mishnah (75b): These are the ones who transgress a prohibition: The lender and the borrower, the guarantor and the witnesses. It is prohibited to serve as a guarantor for such a loan.

אלא לגוי וכיון דדיניה דגוי דאזיל בתר ערבא, איהו ניהו דקא שקיל מיניה רביתא!

Rather, it must mean that one may serve as a guarantor for a non-Jew who lends to another Jew with interest. This is also difficult, since the law of the non-Jews is that he goes after the guarantor to collect the money without trying to collect first from the borrower. Under non-Jew law, it is the responsibility of the guarantor to pay the lender and to then retrieve the money from the borrower. Consequently, when this occurs, the guarantor is considered to have borrowed money from the non-Jew and lent it himself to the Jew, with the result that the guarantor is the one who takes the interest from the borrower, which is prohibited.

אמר רב ששת: שקיבל עליו לדון בדיני ישראל. אי קיבל עליו לדון בדיני ישראל ⁠– רבית נמי לא לשקול! אמר רב ששת: שקיבל עליו לזו, ולא קיבל עליו לזו.

Rav Sheshet said: The case is that the non-Jew accepted upon himself to have this transaction judged by the laws of the Jews, so that he may not claim repayment from the guarantor. The Talmud asks: If the non-Jew accepted upon himself to have this transaction judged by the laws of the Jews, he should also not take interest, since that is prohibited by Jewish law. In response, Rav Sheshet said: He accepted upon himself the laws of the Jews with regard to this, the procedural matter with regard to the method of collection, but he did not accept upon himself the laws of the Jews with regard to that, the prohibition against taking interest.