The term "without recourse" is often used in relation to loans. When a loan is made "without recourse", the lender cannot come after the borrower for any additional payments if the borrower defaults on the loan. This means that the lender is taking on all of the risk associated with the loan. What is a Lendee called? A lendee is a person who borrows money from another person or institution.
What does non-recourse basis mean? Non-recourse basis means that the borrower is not personally liable for repaying the loan. The lender can only collect from the collateral (usually the property being purchased with the loan). If the collateral is sold for less than the amount of the loan, the borrower is not liable for the difference. What is a loan giver called? The person who gives the loan is called the lender, and the person who takes the loan is called the borrower.
What are the three main types of lending?
The three main types of lending are secured, unsecured, and peer-to-peer.
Secured loans are those that are backed by collateral, such as a home or a car. If the borrower defaults on the loan, the lender can seize the collateral to recoup their losses. Unsecured loans are not backed by collateral, and as such, they tend to have higher interest rates than secured loans.
Peer-to-peer lending is a type of lending that allows individuals to borrow and lend money to each other without going through a traditional financial institution. This type of lending is typically done online through platforms that match borrowers and lenders.
Do non-recourse loans exist?
Yes, non-recourse loans do exist. A non-recourse loan is a loan where the borrower is not personally liable for repayment. This means that if the borrower defaults on the loan, the lender cannot go after the borrower's personal assets to repay the loan.
Non-recourse loans are usually used in situations where the borrower is using the loan to purchase an asset, such as a piece of real estate. The asset is used as collateral for the loan, and if the borrower defaults, the lender can seize the asset and sell it to repay the loan.
Non-recourse loans can be harder to obtain than other types of loans, because the lender is taking on more risk. As a result, they often have higher interest rates and stricter terms than other loans.