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

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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:

  1. Divide the desired loan amount by the appraised value of the collateral.
  2. 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

  1. Asset value
    • When the asset was made
    • Condition
    • Rarity
    • Materials used
    • Demand on the secondary market
    • Current market conditions
  2. 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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The content provided by Qollateral, LLC is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on our Site constitutes a solicitation, recommendation, endorsement, or offer by Qollateral, LLC or any third party service provider to buy or sell any commodities, securities or other financial instruments in this or in in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. Qollateral, LLC is not an attorney, accountant or financial advisor, nor is it holding itself out to be, and the information contained on this Website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.

All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the Site constitutes professional and/or financial advice, nor does any information on the Site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. Qollateral, LLC is not a fiduciary by virtue of any person’s use of or access to the Site or any content contained therein. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the Site before making any decisions based on such information or other content. In exchange for using the Site, you agree not to hold Qollateral, LLC, its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the Site.

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