Here’s Everything You Need to Know About the LTV Ratio

1
Heres Everything You Need to Know About the LTV
Ratio
2
What does the LTV ratio mean?
1

• It means loan to value ratio with respect to the
  property's current market value.
• You cannot receive funds greater than LTV.

3
How to calculate the LTV ratio?
2

• Use formula- (Amount borrowed Property's value)
  100
• You can also use an online LTV ratio calculator.

4
How does the loan-to-value ratio work?
3

• The lender determines the loan amount based on
  your property's worth.
• LTV is used to set the upper borrowing limit
  against the property.

5
RBI directive on LTV ratio
4

• For a house loan up to Rs 30 lakhs, the maximum
  LTV allowed is 90.
• Loans ranging between Rs 30 lakh and Rs 75 lakhs
  can qualify for 80 LTV.
• For loans above Rs 75 lakhs, you can get 75 of
  the property value.

6
Is it better to have a higher LTV or lower LTV?
5
7
From the lender's perspective
6

• A lower LTV minimises the chance of default.

8
From the borrower's perspective
7

• Borrowers prefer a higher loan-to-value ratio to
  deal with their money crunch better.

9

• It is crucial to understand the loan-to-value
  ratio well before applying for a secured loan.

10
Thank You !
Would Love to hear from you.
Hero Fincorp Limited
09, Basant Lok, Vasant Vihar, New Delhi -
110057
Tel [phone]
Email corporate_at_herofincorp.com
Website https//www.herofincorp.com/
Know More https//www.herofincorp.com/blog/here-
s-everything-you-need-to-know-about-the-ltv-ratio