Friday, December 2, 2022

Recourse Vs Non-Recourse loan

Recourse is the Lender's legal  right to collect the Borrower's pledge collateral if the borrower does not pay their debt obligation

Recourse Loan: It allows lender to pursue additional assets when a borrower defaults on a loan if the debt's balance surpasses the collateral's value. 

Non-Recourse loan: It permits the lender to seize only the collateral specified in the loan agreement, even if its value does not cover the entire debt. 

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