The loan-to-value ratio, or “LTV,” is a metric Qollateral uses to determine the amount a customer can finance for a secured loan. It works by comparing the desired loan amount against the asset’s liquid wholesale value. As a result, Qollateral offers one of the most competitive LTV ratios in the nation. Understanding this ratio is important because it can help secure a higher-offer loan.
We’ve compiled everything you need to know in this quick and easy-to-understand guide on collateral LTV ratios.
Ready to start the loan process? Book an appointment or call or text the Qollateral team at 212-287-5257.
What Is Loan-to-Value Ratio?
The LTV ratio is a number lenders use to compare the loan amount to the assets being used as collateral. It helps companies like Qollateral determine the risk of an asset-backed loan before it’s approval.
- Low LTV ratio loans are less risky and benefit the lender but limit how much borrowers can loan against their valuable assets.
- High LTV ratio loans, like those offered by Qollateral, provide borrowers with higher loan amounts while remaining competitive.
Example of LTV in Action:
For instance, imagine a customer using a $15,000 diamond engagement ring as collateral.
- At 65% LTV from other collateral lenders: Total Loan amount = $9,750.
- At 70%-80%, LTV from Qollateral: Total Loan amount = $10,500-$12,000.
This example demonstrates why choosing a trusted with high-offer loans is imperative to fund your financial needs.
Assets Accepted at Qollateral:
- Luxury Watches
- High-End Jewelry
- Designer Handbags
- Loose Diamonds and Gemstones
- Diamond Jewelry and Engagement Rings
- Precious Metals
- Numismatic Coins
How is Loan-to-Value Ratio Calculated?
To determine the LTV Ratio:
- Divide the desired loan amount by the appraised value of the collateral.
- Multiply the results by 100.
For example, If you want an $8,000 loan using a Rolex watch valued at $10,000:
($8,000 ÷ $10,000) x 100 = 80% LTV ratio.
What is a Good LTV?
A “good” LTV will likely vary depending on the lender and type of loan, but generally:
- 70%-80% LTV is favorable for borrowers, offering higher loan amounts while remaining manageable.
For example, if you need $13,000 to cover an unexpected medical expense, you would need an asset worth at least $20,000 if you aim for a 65% LTV ratio. In contrast, Qollateral would offer $16,000 on the same loan at 80%.
What Types of Loans Use LTV?
LTV is used in many lending sectors, such as:
- Home Mortgages
- Auto Loans
- Asset-Backed Loans (like those at Qollateral)
Factors That Influence LTV
- Asset value
- When the asset was made
- Condition
- Rarity
- Materials used
- Demand on the secondary market
- Current market conditions
- Loan amount
- Calculated as a percentage of the asset’s liquid wholesale value.
How to Improve Your LTV Ratio
There are many ways to improve the LTV ratio in other industries, such as making a larger down payment if you buy a home. Fortunately, Qollateral already provides the nation’s highest LTV ratios, ensuring the highest-offer loans.
Ways to improve LTV at Qollateral:
- Borrow less against the asset pledged as security for the loan
- Choose an asset with a higher value.
Why Understanding LTV Matters
At Qollateral, we believe in complete transparency. We empower customers with knowledge to maximize the value of their assets, including understanding how the loan-to-value ratio impacts luxury collateral lending.
Get Started Today
Ready to secure a loan against collateral? Book an appointment or contact Qollateral for a free appraisal at 212-287-5257
