What Is Loan-to-Value (LTV) and Why Does It Matter?
LTV compares what you borrow with the value of your collateral, and drives every risk threshold.
Updated
Loan-to-value is the ratio between your outstanding loan balance and the current market value of your collateral. Borrowing $50,000 against $100,000 of collateral is a 50% LTV.
Why It Matters
Your LTV changes continuously as the price of your collateral moves. Because price falls push LTV up, a lower starting LTV leaves more room before any action is required. Arvexo uses LTV to decide when to notify you, when to issue a margin call and, as a last resort, when to liquidate collateral.
Lowering Your LTV
- Add collateral to your deposit address at any time.
- Repay part of the outstanding balance.
- Choose a lower LTV when you set up the loan.
