Non-recourse Debt

Definition

  • A secured loan that is backed by collateral, often real property. The borrower of nonrecourse debt is not personally liable for the debt. In other words, if the borrower defaults on his or her loan, the lender can collect the collateral, but the borrower is not responsible for the remaining balance. Also known as "non-recourse debt" or a "non-recourse loan."

Synonyms
non-recourse loan

Alternate Spellings
secured loan, nonrecourse debt, secured debt

Related Terms and Acronyms

  • Borrower Definition,
    • A person who borrows money or obtains a loan.
  • Collateral Definition,
    • Any property pledged as security for repayment of a debt.
  • Commercial Mortgage Definition, Very Important,
    • A mortgage for commercial property.
  • Default Definition,
    • When a borrower fails to fulfill the obligations of a loan or lease.
  • Lender Definition,
    • The bank or mortgage company offering the loan.
  • Liability Definition,
    • A situation where one party is found to be legally responsible for something.
  • Loan Definition,
    • Letting another party use something of value temporarily.
  • Policy Loan Definition,
    • A loan where a life insurance policyholder's death benefit is used as collateral.
  • Real Property Definition,
    • Permanent, non-movable property, such as land and buildings.
  • Secured Loan Definition,
    • Borrowed money that is backed by collateral.
  • Unsecured Loan Definition,
    • An advance of money that is not secured by collateral.
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