Learn how recourse and non-recourse loans differ, their benefits and risks, and impact on your financial choices.

A “debt” arises by virtue of the receipt of money or acquisition of property by an individual who has a corresponding obligation to repay the creditor/lender in money or money’s worth. The terms ...

A non-recourse loan is a type of debt that’s secured by collateral, such as an individual’s car, house or another typically illiquid asset. By securing a non-recourse loan, the lender won’t have the ...

Recourse – The borrower (or guarantor) is personally liable for the full amount of the loan, including any debt remaining after the collateral is foreclosed upon and sold. To satisfy the remaining ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. A recourse is a legal agreement that gives the lender the right to pledged collateral if the ...

Americans have a lot of debt. According to a report from the Federal Reserve Bank of New York, total household debt as of the second quarter of 2025 amounts to $18.4 trillion, largely made up of ...