A recourse loan is a type of loan in which the borrower is personally liable for repaying the full amount of the loan, even if the collateral securing the loan is insufficient to cover the debt. If the borrower defaults on a recourse loan and the value of the collateral is not enough to pay off the debt, the lender may pursue legal action against the borrower to recover the remaining balance.

In a recourse loan, the lender has the right to go after the borrower's personal assets, such as bank accounts, real estate, and other property, to recover the outstanding debt. This means that the borrower is fully responsible for repaying the loan, even if the value of the collateral has significantly decreased.