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Software requirement is a functional or non-functional need to be implemented in the system. Functional means providing particular service to the user.

For example, in context to banking application the functional requirement will be when customer selects “View Balance” they must be able to look at their latest account balance.

Software requirement can also be a non-functional, it can be a performance requirement. For example, a non-functional requirement is where every page of the system should be visible to the users within 5 seconds.

So, basically software requirement is a

Functional or

Non-functional

need that has to be implemented into the system. Software requirement are usually expressed as a statements.

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Types of Requirements

Business requirements: They are high-level requirements that are taken from the business case from the chúng tôi example, a mobile banking service system provides banking services to Southeast Asia. The business requirement that is decided for India is account summary and fund transfer while for China account summary and bill payment is decided as a business requirement

Country Company providing Banking Functionalities or services

India Account Summary and Fund Transfer

China Account Summary and Bill Payment

Architectural and Design requirements: These requirements are more detailed than business requirements. It determines the overall design required to implement the business chúng tôi our educational organization the architectural and design use cases would be login, course detail, etc. The requirement would be as shown below.

Banking use case Requirement

Bill Payment

The customer will can see a dashboard of outstanding bills of registered billers. He can add, modify, and delete a biller detail. The customer can configure SMS, email alerts for different billing actions. He can see history of past paid bills.

The actors starting this use case are bank customers or support personnel.

System and Integration requirements: At the lowest level, we have system and integration requirements. It is detailed description of each and every requirement. It can be in form of user stories which is really describing everyday business language. The requirements are in abundant details so that developers can begin chúng tôi in example of Bill Payment module where requirement will be mentioned for adding a Biller

Bill Payment Requirements

Add Billers

Utility Provider Name

Relationship Customer Number

Auto Payments – Yes/No

Pay Entire Bill – Yes/No

Auto Payment Limit – Do not pay if Bill is over specified amount

Knowledge transfer from colleagues or employees already working on that project

Talk about project to business analyst, product manager, project lead and developers

Analyze previous system version that is already implemented into the system

Analyze the older requirement document of the project

Look into the past Bug reports, some of the bug reports are turned into enhancement request which may be implemented into current version

Look into installation guide if it is available to see what are the installation required

Analyze the domain or industry knowledge that team is trying to implement

Whatever source of requirement you get make sure to document them in some form, get them reviewed from other experienced and knowledgeable team members.

Consider example of an educational software system where a student can register for different courses.

Lets study how to analyze the requirements. The requirements must maintain a standard quality of its requirement, different types of requirement quality includes

Atomic

Uniquely identified

Complete

Consistent and unambiguous

Traceable

Prioritized

Testable

Let understand this with an example, there are three columns in the table shown here,

The first column indicates- “requirement quality”

The second column indicates- “bad requirement with some problem”

The third column is same as second column but – “converted into a good requirement”.

Requirement Quality Example of bad requirement Example of good requirement

Atomic

Students will be able to enroll to undergraduate and post graduate courses

Students will be able to enroll to undergraduate courses

Students will be able to enroll to post-graduate courses

Uniquely identified 1- Students will be able to enroll to undergraduate courses1- Students will be able to enroll to post-graduate courses

Course Enrolment

Students will be able to enroll to undergraduate courses

Students will be able to enroll to post-graduate courses

Complete A professor user will log into the system by providing his username, password, and other relevant information A professor user will log into the system by providing his username, password and department code

Consistent and unambiguous A student will have either undergraduate courses or post-graduate courses but not both. Some courses will be open to both under-graduate and post-graduate A student will have either under-graduate or post graduates but not both

Traceable Maintain student information-mapped to BRD req.ID? Maintain student information-Mapped to BRD req ID 4.1

Prioritized Registered student-Priority 1Maintain User Information-Priority 1Enroll courses-Priority 1View Report Card-Priority 1 Register Student-Priority 1Maintain User Information-Priority 2Enroll courses-Priority 1View Report Card-Priority3

Testable Each page of the system will load in an acceptable time-frame Register student and enrol courses pages of the system will load within 5 seconds

Now let’s understand each of these requirement in details starting with Atomic.

So each and every requirement you have should be atomic, which means it should be at very low level of details it should not be possible to separated out into components. Here we will see the two examples for requirements, at Atomic and uniquely identified requirements levels.

So let us continue with example of system build for education domain. Here, the bad requirement is “Students will be able to enroll to undergraduate and post graduate courses” . This is a bad requirement because it is not atomic because it talks about two different entities undergraduates and post-graduates courses. So obviously it is not a good requirement but bad requirement, so correspondence good requirement would be to separate it out into two requirements. So one talks about the enrolment to undergraduate courses while the other talks about the enrolment to the post-graduate courses.

Similarly the next requirement quality is to check for uniquely identified, here we have two separate requirement but they both have same ID#1. So, if we are referring our requirement with reference to ID#, but it is not clear which exact requirement we are referring to document or other part of the system as both have same ID#1. So separating out with unique id’s, so good requirement will be re-return as section 1- course enrolments, and it has two requirements 1.1 id is enrolment to undergraduate courses while 1.2 id is enrolment to postgraduate courses.

Also, each and every requirement should be complete. For example, here the bad requirement says a “professor user will log into the system by providing his username, password and other relevant information”. Here the other relevant information is not clear, so the other relevant information should be spelt out in good requirement to make the requirement complete.

Next each and every requirement should be consistent and unambiguous, so here for instance we have requirements “A student will have either undergraduate courses or post-graduate courses but not both” this is one requirement there is some other requirement that says “Some courses will be open to both under-graduate and post-graduate students”.

The problem in this requirement is that from the first requirement it seems that the courses are divided into two categories under graduate courses and post graduate courses and student can opt either of two but not both. But when you read other requirement it conflicts with the first requirement and it tells that some courses will open to both post-graduate and under-graduate.

So it is obvious to convert this bad requirement into good requirement which is “A student will have either under-graduate courses or post-graduate courses but not both”. Which means that every course will be marked either being as under-graduate course or post-graduate course

Each and every requirement should be traceable because there are already different levels of requirement, we already saw that at the top we had business requirements, and then we have an architectural and design requirements followed by system integration requirements.

Now when we convert business requirement into architectural and design requirements or we convert architectural and design requirements to system integration requirements there has to be traceability. Which means that we should be able to take each and every business requirements and map it to the corresponding one or more software architectural and design requirement. So here is an example of bad requirement that says “Maintain student information – mapped to BRD req ID?” the requirement id is not given over here.

So converting it to a good requirement it says same thing but it is mapped with the requirement id 4.1. So mapping should be there for each and every requirement. Same way we have high level and low level mapping requirement, the mapping is also there between system and integration requirement to the code that implements that requirement and also there is a mapping between the system and integration requirement to the test case which test that particular requirement.

So this traceability is all across entire project

Prioritized View Report Card-Priority 1 View Report Card-Priority3

Then each and every requirement must be prioritized, so the team has guideline so which requirement that able to implement first and which can be done later on. Here you can see the bad priority has register student, maintain user information and each and every requirement has given priority-1. Everything cannot be at same priority, so requirement can be prioritized. So the example of good requirement over here is the register student and enroll courses is given the highest priority 1, while maintain user information comes below at priority 2 and then we have view report card at priority-3

Testable Each page of the system will load in an acceptable time-frame Register student and enrol courses pages of the system will load within 5 seconds

Each and every requirement should be testable, here the bad requirement is “each page of the system will load in an acceptable time frame”. Now there are two problems with this requirement first is that each page meaning that there can be many pages, which going to blow up the testing efforts. The other problem is that it say the page is going to load in acceptable time frame, now what is acceptable time frame? Acceptable to whom. So we have to convert the non-testable argument into a testable argument, which specifically tells about which page we are talking about “register student and enroll courses pages” and the acceptable time frame is also given which is 5 seconds.

So this is how we have to look at each and every requirement at appropriate level. For example, if we are going to build a software with regards to system and integration requirements. We have to look in system and integration requirements given in the software requirement specifications or user stories and apply to each and every requirement quality. Then check whether each and every requirement is atomic, uniquely identified, and complete and so on.

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Types And Criteria With Example

Definition of Non-Controlling Interest

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The portion of the interest is left out after the holding company’s claim. For example, Zee Ltd wants to acquire 60% of the equity shares of B Ltd, so in this case, out of 100% holding of B Ltd, 60% will be given to Zee. Now Zee will be the holding company, and the rest of the shares % which is 40%, will be considered as Non-controlling interest. They will not allow to manage any company affairs and not require interfering in the company’s decisions. Sometimes a situation arises when there are losses in the company, so in that case, the losses which apply to the It is combined subsidiary may exceed the non-controlling interest of the single subsidiary. The non-controlling interest holders get the share as per the confined % of the controlling interest they share in the company.

Solution:

Particulars

Total

Holding Company

Controlling Interest (80%)

Non controlling interest ( 20%)

Share Capital 800,000.00 640,000.00 160,000.00

Reserve 60,000.00 48,000.00 12,000.00

860,000.00 688,000.00 172,000.00

There are two types of non-controlling interest: direct non-controlling interest and another is Indirect non-controlling interest.

In direct non-controlling interest, the minority shareholders, i.e., those who are non-controlling interest bearing in the company, will get the profits to share of pre and post-acquisition. In contrast, in the case of indirect non-controlling interest, only post-acquisition profits are shared with the minority interest holders, and the pre-acquisition profits are not shared. The non-controlling Interest holders get a share of this distribution as per their controlling interest percentage in the company.

First of all, we must find that the acquisition is on which date.

Then find out the company which acquires and the company which is acquiring.

Calculation of Pre-acquisition and Post-acquisition profits are done.

Calculation of Pre-acquisition and Post-acquisition of reserves and surpluses are done.

In the next step, the distribution of profits takes place.

The Minority Interest record is under the head of Equity and Liability.

Minority Interest is separately recorded in the Balance sheet with its own name.

Non-Controlling Interest holders can anyway get access to the company’s financial books.

Taking a small share as a minority interest holder in a very emerging business can help the growth of individual investors.

The Non-Controlling Interest holders can see the business developments and get an insider’s view to plan their investment in such a way.

In most cases, the minority interest holders gain a huge average return on their funds since they know the company’s norms.

The risk also subsides because a huge investment does not require from the minority interest holders, and thus they can enjoy the benefit of the low risk and more gains on returns.

In the case of a business sale, the minority interest holder can sell part of this stake without many legal complications.

It is a very wide term. Minority shareholders of the company are not allowed to participate in the company’s meetings, but sometimes they can make a decision for the board members. If the board’s performance is not satisfactory, then the minority shareholders can ask the board to take action against them. In the corporate, the minority interest holder meeting and voting can be very influential. Non-controlling Interest holder also makes huge profits and returns on their investment in the company. They make very little investment per the company’s emerging business but can gain huge profits. Non Controlling Interest also gets their share in case of an acquisition. It is given emphasis in the Balance Sheet and is shown as a separate item.

Example And Explanation With Excel Template

What is CAPE Ratio?

CAPE Ratio, abbreviated form for Cyclically-Adjusted Price to Earnings Ratio, is used as a valuation tool to measure the relationship between the company’s earnings per share over a period of 10 years and company’s stock price flushing out all the fluctuations which may occur in the company’s profits during various business cycles and different periods and seasons.

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Formula

The formula for CAPE ratio is:

CAPE Ratio = Stock Price / 10-Years Average Earnings Per Share Adjusted for Inflation

CAPE ratio is considered to be a valuation measure which takes into consideration the effect of a company’s earning over a period of a decade post considering the effect of inflation and its simultaneous relation with that company’s stock price in the market. The utmost important point here is that the CAPE ratio can be also applied to any type of indices to get an idea about whether the market is over-valued or under-valued.

This is also referred to as the Shiller P/E ratio, as it was largely popularized by a professor of Yale University, namely, Robert Shiller.

Let’s take an example to understand the calculation in a better manner.

You can download this CAPE Ratio Excel Template here – CAPE Ratio Excel Template

Carivacous Ltd is listed in a stock exchange currently trading at $1500 per share. The current year EPS of the company is $125. Below given table provides details of earnings per share (EPS) of the past 10 years pertaining to the stock of Carivacous Ltd. Along with EPS, inflation rates are provided pertaining to the specified years respectively. Calculate the CAPE ratio for Carivacous Ltd.

Solution:

PE Ratio is calculated using the formula given below

PE Ratio = 1500 / 125

PE Ratio = 12

10-Years Average Earnings Per Share Adjusted for Inflation is calculated as

CAPE Ratio is calculated using the formula given below

CAPE Ratio = Stock Price / 10-Years Average Earnings Per Share Adjusted for Inflation

CAPE Ratio = 1500 / 49.73

CAPE Ratio = 30.16

Thus, it can be seen that although the PE for the stock for the current year is 12, its CAPE ratio is at 30. Alternatively, you can also say that the stock is overvalued.

Let us take a different example to understand the valuation aspect of a stock or index. Now, consider that an Index has a PE ratio of, say 20 with a historical PE ratio of 24. Now, post computing the CAPE ratio (as explained in the earlier example), the CAPE ratio for the index stands at 34. Please give an explanation of the valuation of the index.

In the case at hand, it is pertinent to note that the current PE of the Index, 20, is very similar or nearby to its historical PE, which is at 24.

Now, you may note that the historical PE is a formula to calculate average PE of the stock or index over the period of 10 years as a simple average. On the other hand, the CAPE ratio stands at 34, which takes into consideration the inflation and cyclical impact of the EPS over a period of 10 years. Even after such adjusted, the CAPE ratio is fairly higher than the current PE and historical PE, which makes the index quite overvalued and risky to be invested in.

It is mainly used as a financial tool to analyze the PE ratio of a company or index post considers the impact of cyclical changes in the economy over a period of 10 years.

Apart from being used as a financial tool, the CAPE ratio is used to determine whether the stock of a listed company is over-valued or under-valued, as it is quite similar to the PE ratio.

A consistent analysis of the CAPE ratio will be useful as a tool for analyzing the future trends and patterns of the stock or index, as the case may be.

Below we will learn about the limitation and benefits of CAPE ratio:

Given below are the main benefits of CAPE ratio:

It is a very simple mathematical formula and thus easy to calculate by anyone having a basic knowledge of finance;

Due to the fact that this ratio considers the average value of EPS over a period of time, it balances out the effect of any cyclical returns the company may generate and thus gives a better picture of the earnings by the company;

It takes into consideration the impact of inflation on the economy.

The main concern is that the ratio considers an average of earnings for a period of 10 years. In a practical scenario, there are various changes that a business may undergo in such a long timeframe and thus affecting the way business is being carried on for over the years. In such a situation, it may not be right to compare a business today with what it was a decade ago;

In addition to the above point, it needs to be noted that the law governing the business changes massively over such long timeframe and making an impact of the way business is being carried on;

It may be noted that there are various companies that declare and pay dividends to their shareholders. Ratio is completely independent of this and does not take into account any dividend numbers;

Another point that is important and yet not considered while computing the ratio is that the market keeps fluctuating and so does the demand market of a particular stock.

To conclude the whole discussion, it shall be right to say that the CAPE ratio is a tool or method to measure the valuation aspect of any stock or index. It provides an answer in the form of whether the stock or index is over-valued or under-valued. It takes into consideration the impact from an economics point of view and also of the fact of any cyclical changes which may affect stock or index and thus it a better measure to get an insight about future returns of the stock or index in question.

This is a guide to the CAPE Ratio. Here we discuss how to calculate the cape ratio along with practical examples. We also provide a downloadable excel template. You may also look at the following articles to learn more –

How To Use Tensorflow Gather With Example?

Introduction to TensorFlow gather

Tensorflow gather is used to slice the input tensor object based on the specified indexes. The Keras is the library available in deep learning, which is a subtopic of machine learning and consists of many other sub-libraries such as TensorFlow and Theano. These are used in Artificial intelligence and robotics as this technology uses algorithms developed based on the patterns in which the human brain works and is capable of self-learning. Tensorflow Keras is one of the most popular and highly progressing fields in technology right now, as it possesses the potential to change the future of technology.

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The output or value returned by the gather function consists of a tensor with the datatype equivalent to the one whose value is passed in arguments.

The arguments of parameters used in the gather function are listed in detail one by one –

Arguments – It is nothing but the source tensor or matrix with the rank equivalent to or greater than the value of axis +1.

Index 1, index 2, …. – The data type of this tensor is either int 64 or int 32, and the value of this parameter should be in the range of 0 to arguments. Shape [axis].

Dimensions of the batch – This is an integer value representing the count or number of batch dimensions present. This value should be equivalent to the rank of indices or less than that.

Axis – This value should be equivalent to or greater than batch dimensions and have the data type 64 or 32. The indices’ value helps specify the axis as it should be higher than or equal to batch dimensions. In addition, this value helps us specify the index from where the value should be gathered.

Operation name – Hels in the specification of the operation’s name to be performed.

Validation for the specified indices – This parameter is deprecated and has no usage as, by default, the validation of indexes always happens and is done by the CPU internally.

Note that inside the CPU, if the bound index is found, an error occurs, and in the case of GPU, if we find out the bound index, then the output will contain its corresponding value.

We will need to follow certain steps to use the TensorFlow gather function. Some of them are as listed below –

The required libraries should be imported at the top of the code file.

The input data and the required objects should be assigned the initial value.

You can optionally print your input data if you want to observe before and after the difference.

Make use of the gather function to calculate and get the resultant.

After gathering, you can again print the tensor data to observe the difference made by the gather function.

Run the code and observe the results.

We need to note certain things when we are using the gather function. First, the gather function starts slicing the tensor from arguments that are params axis, taking along the consideration of indexes. The value of the index can be any integer that can have the tensor of any given dimension. Most often, it is one-dimensional.

The use of the function tensorObj. getitem happens in case of scalar quantities, sclices of python, and tf. newaxis. To handle the indices of the tensor, the tensorObj.gather extends its functionality. When used in its most simple format, it resembles scalar indexing.

The most commonly used case is when we have to pass only a single axis index tensor. As this data does not contain the sequential pattern, it cannot be recognized as a slice of python. The arguments or parameters can have any shape. The selection of the slices is made based on any axis that depends on the argument of the axis whose default value is 0.

Sample Educba Example 1:

print (‘resultant: ‘, resultant)

Output:

After executing and running the above code, we get the following output –

Screenshot of the output –

print (‘resultant: ‘, resultant)

After executing and running the above code, we get the following output –

Screenshot of the output –

The use of tensorflow gather is used to prepare the slices of the input tensor along the axis depended on the indices that are passed as the argument. Some of the functions that are related with tensorObj.gather include tensorObj.scatter, tensorObj.getItem, tensorObj.gather_nd, tensorObj.boolean_mask, tensorObj.slice and tensorObj.strided_slice.

This is a guide to TensorFlow gather. Here we discuss the Introduction, overviews, args, How to use TensorFlow gather, and Examples with code implementation. You may also have a look at the following articles to learn more –

Basic Sql Injection And Mitigation With Example

SQL injection is a type of cyber attack that allows attackers to execute malicious SQL statements on a database. These statements can be used to manipulate data, retrieve sensitive information, or even delete entire databases. It is one of the most common and dangerous types of web vulnerabilities, and it can affect any website or web application that uses a SQL database.

In this article, we will cover the basics of SQL injection, how it works, and how to prevent it. We will also provide an example of a basic SQL injection attack and show how to mitigate it.

SQL, or Structured Query Language, is a programming language used to manage and manipulate data stored in relational databases. It is the standard language for interacting with databases, and it is used by millions of websites and applications around the world.

SQL injection is a type of cyber attack that exploits vulnerabilities in SQL-based applications. It allows attackers to insert malicious code into an application’s SQL statements, which can then be executed by the database. This can allow attackers to gain unauthorized access to sensitive data, modify or delete data, and even gain control of the entire database.

For example, consider a simple login form that asks for a username and password. The application might generate an SQL query like this to verify the user’s credentials &miuns;

In this case, the $username and $password variables are replaced with the user’s input. If a user enters their own username and password, the query will work as intended. However, if an attacker enters malicious input, they can manipulate the query to do things like retrieve sensitive data or even delete entire tables.

For example, an attacker might enter the following as their password −

Preventing SQL injection attacks requires a combination of good design practices and proper input validation. Here are a few steps you can take to protect your application −

Use parameterized queries − One of the easiest and most effective ways to prevent SQL injection is to use parameterized queries. This involves separating the SQL code from the user input and passing the input as a separate parameter. This ensures that the input is treated as a value, rather than part of the SQL code, and makes it much harder for attackers to inject malicious code.

Validate and sanitize user input − Another important step is to validate and sanitize all user input. This involves checking the input for any characters or patterns that might indicate an attempt to inject malicious code. You should also limit the type and length of input that users can enter.

Use prepared statements − Prepared statements are a type of parameterized query that can be used to protect against SQL injection. They allow you to create a template for an SQL statement, and then pass in the parameters at a later time. This can help to prevent SQL injection because the parameters are not parsed until they are passed to the prepared statement, which means that any malicious code will be treated as a value, rather than part of the SQL code.

Enforce strong passwords − One of the most common ways for attackers to gain access to a database is by guessing or cracking weak passwords. To prevent this, you should enforce strong password policies, including using long passwords that are difficult to guess or crack. You should also consider using two-factor authentication or other security measures to protect sensitive accounts.

To illustrate the basics of SQL injection, let’s walk through an example of a simple login form that is vulnerable to injection attacks. We will then show how to mitigate the vulnerability using parameterized queries.

First, let’s create a simple table in a MySQL database to hold our users −

CREATE TABLE

users

(

VARCHAR

(

)

NULL

VARCHAR

(

)

NULL

)

;

Next, let’s create a login form with a simple HTML form −

The form sends a POST request to chúng tôi with the username and password fields. We can then use PHP to handle the request and check the user’s credentials against the database −

<?php

$db

new

mysqli

(

"localhost"

"username"

"password"

"database"

)

;

(

isset

(

$_POST

[

"username"

]

)

isset

(

$_POST

[

"password"

]

)

{

$username

$_POST

[

"username"

]

;

$password

$_POST

[

"password"

]

;

$query

"SELECT * FROM users WHERE username='

$username

$password

;

echo

"Logged in successfully!"

;

}

else

{

echo

"Invalid username or password"

;

}

This code creates an SQL query using the `username` and `password` fields from the form, and then executes the query using the `query()` method of the ‘mysqli’ object. If the query returns any rows, it means that the username and password are correct, and the user is logged in.

However, this code is vulnerable to SQL injection attacks. An attacker can enter malicious input into the form, which will be incorporated directly into the SQL query. For example, if an attacker enters the following as their username −

The resulting SQL query will look like this −

<?php

$db

new

mysqli

(

"localhost"

"username"

"password"

"database"

)

;

(

isset

(

$_POST

[

"username"

]

)

isset

(

$_POST

[

"password"

]

)

{

$username

$_POST

[

"username"

]

;

$password

$_POST

[

"password"

]

;

echo

"Logged in successfully!"

;

}

else

{

echo

"Invalid username or password"

;

}

In this version of the code, we use a prepared statement to create a template for the SQL query. We then bind the username and password variables to the prepared statement as parameters, using the bind_param() method. This ensures that the input is treated as a value, rather than part of the SQL code, which makes it much harder for attackers to inject malicious code.

SQL injection is a serious and widespread security vulnerability that can compromise the integrity and confidentiality of your database. To protect your applications and your data, it is important to follow best practices for designing and implementing your SQL code, and to use proper input validation and sanitization techniques. By using parameterized queries and other prevention measures, you can help to prevent SQL injection attacks and keep your applications and data safe.

Types And Benefits Of Recourse Loan With Example

What is a Recourse Loan?

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Some of the key takeaways of the article are:

A recourse loan is a financing instrument in which the lender can seize the collateral and any other assets in the defaulter’s name to recover the debt money.

Examples of other assets include other bank deposits, income sources, etc.

A recourse loan is backed by collateral and the borrower’s liability. Hence, the lender has to assume significantly lower risk in this type of loan.

Although there are many different recourse loans, the two most common types are hard money loans and auto loans. Not all mortgages are recourse loans, but the hard money loans in real estate purchases are recourse loans.

Let us now look at the following example to understand the concept of recourse loans.

Four years back, John got a stable job in a multinational company with an annual package of $75,000. Three months after joining the job, he purchased a house worth $300,000 in the countryside. However, when he checked his savings account, he realized that he had a savings of $60,000, which he decided to use as equity in this real estate purchase. So, he approached a bank for a housing loan of $240,000.

Unfortunately, today John defaulted on the bullet payment, and the lender immediately seized his house for foreclosure and subsequent recovery of the debt from the sale, resulting in proceeds of $75,000. So, the remaining $75,000 (= $150,000 – $75,000) plus the interest cost will be recovered through garnishment, wherein the outstanding loan balance will be directly deducted from his monthly paycheck until the entire loss amount is settled.

In this way, the recovery of losses occurs in a recourse loan when the borrower defaults.

Hard money loans: In the case of a real estate acquisition, a hard money loan is considered a recourse loan because its terms give the lender the right to take possession of the borrower’s property after default and then resell it for a more significant gain.

Auto loans: Since the value of automobile cars depreciates over a period, which exposes the lenders to the risk of adequate recovery in the event of a default. Hence, most auto loans are recourse loans in nature.

Some of the significant benefits of a recourse loan are as follows:

Some assets adequately back it in the form of collateral. Besides, there is the total liability of the borrower, which means that the lender doesn’t need to bear too much risk.

Borrowers get recourse loans as per their credit profile and financial position. People with good credit histories are offered favorable interest rates, while those with poor credit histories can get the loan on the back of their unlimited liability.

With such flexibility in lending terms, these loans result in the maximum flow of money in an economy through more frequent and easy lending.

First, the borrowers who default on a recourse loan may lose much more than the collateral provided because the lender invariably goes after the borrower’s other assets and income stream to recover the outstanding loan balance.

Further, the borrower who fails to repay a recourse loan loses not just the money, but such an event can be a very traumatic experience for them. It can get tricky for them to cope psychologically.

So, it can be seen that a recourse loan is a binding debt financing instrument that secures the lenders and makes their life much easier. But, on the other hand, it is not so favorable for the borrowers as they may be exposed to severe consequences in the event of a default. Hence, borrowers should consider all the aspects of the loans before signing up for any recourse loan.

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