Title: Here’s Everything You Need to Know About the LTV Ratio
1Heres Everything You Need to Know About the LTV
Ratio
2What 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.
3How to calculate the LTV ratio?
2
- Use formula- (Amount borrowed Property's value)
100 - You can also use an online LTV ratio calculator.
4How 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.
5RBI 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.
6Is it better to have a higher LTV or lower LTV?
5
7From the lender's perspective
6
- A lower LTV minimises the chance of default.
8From 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.
10Thank You !
Would Love to hear from you.
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