nonrecourse loan
- A loan that allows the lender to claim only the pledged collateral if the borrower defaults, not the borrower's other assets
- A mortgage typically structured as a nonrecourse loan protects homeowners' other assets in case of default.
- Nonrecourse loans provide a safety net for borrowers, as their personal property cannot be seized to repay the debt.
- When the business failed, she was grateful that her business loan was a nonrecourse loan, and her personal assets were not at risk.
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