Full Recourse Debt


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.

  1. Recourse

    A legal agreement by which the lender has the rights to pledged ...
  2. Non-Recourse Expense

    An accounting term that sometimes refers to the cost of absorbing ...
  3. Debt

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

    1. The failure to promptly pay interest or principal when due. ...
  5. Loan

    The act of giving money, property or other material goods to ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
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