The full form of LTV is Loan to value ratio. It is a financial ratio that compares the loan amount to the asset being financed. This ratio is significant for lenders because it assists them in determining the risk of lending money to a borrower. A higher LTV ratio indicates a higher risk to the lender, which may necessitate a higher interest rate or the use of mortgage insurance.
RBI Guidelines on LTV
The Reserve Bank of India has established guidelines for all lenders that govern loan disbursement policy.
Lenders compute the LTV ratio using the following formula:
LTV Ratio (%) = Amount Borrowed/Property Value X 100
LTV (Loan to Value) is an important ratio used by lenders to assess the risk of a loan. It compares the amount of a loan to the appraised value or purchase price of the asset being financed.As a borrower, having a lower LTV ratio can improve your chances of getting approved for a loan with a favorable interest rate, which can be achieved by making a larger down payment or negotiating a lower purchase price.
Anyway, you can always apply for a Navi cash loan that requires minimal documents and gives you instant disbursal.
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