The Advantages of Non-Recourse Loans

Non recourse loans are a lending tool that many borrowers use to obtain credit. With a non recourse loan, the loan is held by collateral, on the part of the borrower. If the loan were to default, only the collateral could be seized by the bank.

Less Liability

With a non recourse loan, you are only responsible for the collateral associated with the loan. If you default, you lose only the collateral. If the value of the asset dropped during the period of the loan, the difference between the value and the loan does not have to be re-paid. In that case, the lender would be responsible for the debt.

Better Deals

With a non recourse loan, you can get a better deal than if you had an unsecured loan. The APR will be lower and the loan payment may be as well. You are more likely to get approved if you offer some sort of collateral for the loan.