Full Recourse Debt

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DEFINITION

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.

INVESTOPEDIA EXPLAINS

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.


RELATED TERMS
  1. Recourse

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  2. Non-Recourse Expense

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  3. Asset

    1. A resource with economic value that an individual, corporation or country ...
  4. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  5. Default

    1. The failure to promptly pay interest or principal when due. Default occurs ...
  6. Loan

    The act of giving money, property or other material goods to a another party ...
  7. Non-Recourse Debt

    A type of loan that is secured by collateral, which is usually property. If ...
  8. Limited Recourse Debt

    A debt in which the creditor has limited claims on the loan in the event of ...
  9. Loan Commitment

    A loan amount that may be drawn down, or is due to be contractually funded in ...
  10. Forbearance

    A temporary postponement of mortgage payments.
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