Simple Definition
LTV ratio is used in secured loans such as home loans, gold loans and loan against property. It shows how much loan is given against the assessed value of the asset.
Why It Matters
LTV helps lenders manage risk and helps borrowers estimate how much funding they may receive against an asset.
Example
If a property is valued at ₹50 lakh and the lender offers ₹35 lakh, the LTV is 70%.
FAQs on LTV Ratio
Does higher LTV mean higher risk?
Generally yes, because the loan amount is closer to the asset value.
Is LTV fixed for all lenders?
No. LTV depends on lender policy, asset type and regulatory norms where applicable.