What is loan to value calculator and its use

 The loan to value ratio shows the maximum loan amount a borrower can avail against the property to be mortgaged. This ratio is calculated based on the property's current market value pledged as collateral with the financial institution.

To simplify this complex calculation, borrowers can use a smart tool like an LTV calculator. This would help them in making an informed decision.

How to use an LTV calculator?

Following are the steps to use a loan against property calculator.

Step 1: Visit a lending institution’s website offering an LTV calculator

Step 2: Enter the details like property type and employment status

Step 3: Fill the given areas with relevant information like property value, interest rate and tenor.

Step 4: The result will be displayed underneath.

Potential borrowers can estimate the maximum amount they are eligible for against the property to be pledged. This would aid them in approaching a lender extending substantial funds and levying affordable interest rates.

What are the benefits of using an LTV calculator?

• Time-saving

Potential loan against property borrowers can use the smart tool to evaluate credit availability. They can find precise results within seconds. This helps individuals save precious time that would have been wasted in visiting lending institutions.

Read More: Why a Loan Against Property Is Better than a Business Loan

• Cost-effective

Usually, lending institutions offer free tools like a LAP calculator to gain customers. A potential borrower can use this tool to calculate the LTV ratio and credit availability. They can compare lenders and find the ones extending substantial funds.  This aids in initiating substantial savings on the overall borrowing. This makes the borrowing cost-effective.

• Mobile-friendliness

Most LTV calculators consume less space and are compatible with a mobile interface. Moreover, this tool comes pre-installed with lender specific terms, which makes it convenient for use.

Individuals planning to avail a loan can use this smart loan to value calculator and streamline their application process.