nonrecourse loan

Definition of "nonrecourse loan"
  1. A loan that allows the lender to claim only the pledged collateral if the borrower defaults, not the borrower's other assets
How to use "nonrecourse loan" in a sentence
  1. A mortgage typically structured as a nonrecourse loan protects homeowners' other assets in case of default.
  2. Nonrecourse loans provide a safety net for borrowers, as their personal property cannot be seized to repay the debt.
  3. 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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