Non-recourse
Asset-Backed Securities glossary · Asset Specific Nuances
Definition
A loan secured only by specific collateral, without personal liability of the borrower.
Non-recourse in plain English
A non-recourse loan means the lender can only grab the specific thing the loan paid for — nothing else you own. If you can't repay, they take that collateral (say, the building) and that's the end of it; they can't come after your house, savings, or paycheck. Compare it to a normal car loan ("recourse"), where the bank can chase you for the shortfall if selling the repossessed car doesn't cover the debt. Non-recourse caps your personal downside at whatever you pledged — which is why lenders usually demand more collateral or a higher rate to make that deal.
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