What is a loan-to-value (LTV) ratio?

The LTV ratio compares the loan amount to the asset's liquid wholesale value to determine borrowing power.

How is the LTV ratio calculated?

The LTV ratio is calculated by dividing the loan amount by the asset's appraised value and multiplying by 100.

What is a good LTV ratio?

A good LTV ratio is typically 80%, as it offers higher borrowing power without excessive risk.

Loan-to-Value Ratio: What You Need to Know

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:

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

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