Full Recourse Debt

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DEFINITION of 'Full Recourse Debt'

A guarantee that no matter what happens, the borrower will repay the debt. Typically with a full recourse loan no occurrence, such as loss of job or sickness, can get the borrower out of the debt obligation. In this situation, if there is no collateral for the loan, the lender can go after the borrowers personal assets to collect if the loan is defaulted.

BREAKING DOWN 'Full Recourse Debt'

In contrast, a limited recourse loan would only allow the lender to take assets that are listed as collateral in the signed loan agreement. Also, a non-recourse loan would have no collateral and the lender would only be able to take the asset that is being financed, such as a home in a non-recourse mortgage.

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RELATED FAQS
  1. What is the difference between a non-recourse loan and a recourse loan?

    The essential difference between a recourse and non-recourse loan has to do with which assets a lender can go after if a ... Read Full Answer >>
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    In the most common usage, the terms "asset-based lending" and "asset financing" refer to the same thing. Asset-based lending ... Read Full Answer >>
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    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
  4. In what instances does a business use closed end credit?

    The most common types of closed-end credit used by both businesses and individuals are mortgages and auto loans. Businesses ... Read Full Answer >>
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