Recourse loan is a type of loan where the lender has the power to go after you even if they already have taken your collateral. Basically recourse loans allow the lender to come after you in case you default. You can contrast recourse loan with non-recourse loans, which create more risk for lenders. The lenders are allowed to go after the amount due, and if you default on a recourse loan they can file a case against you, garnish your wages and try to collect the amount that you owe. Deficiency judgment is the legal action to collect money after foreclosure.
A non-recourse loan is a type of loan where the lender is not allowed to pursue on anything other than the collateral. Like if you default on your non-recourse home loan, the lender can only foreclose the house and generally they cannot take further legal actions against you. This type of loan is more risky for lenders, because they can only collect the collateral and nothing else. These loans may have higher interest rate than recourse loans.
Always remember that before acquiring a loan think twice if you can afford to pay it, also consult an attorney or a tax adviser to be certain if you are getting a recourse on non-recourse loan.
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