A non-recourse loan is a type of debt secured by collateral, most often real estate or another substantial asset, where the lender’s only remedy in the event of borrower default is to seize and liquidate the collateral. The borrower is not personally liable for any deficiency if the collateral’s value does not cover the outstanding loan balance. In other words, after repossessing and selling the collateral, the lender cannot pursue the borrower’s other assets or income to recover any remaining debt.
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