It’s a common thing in asset-backed lending to secure your loan with higher-value collateral (overcollateralization). A ratio between the amount of your loan and the market value of your collateral is a Loan-to-Value ratio (LTV).

On CoinLoan, a borrower can set up an LTV ratio in the range from 20% to 70%. Lower LTV means you have a safety bag. In case of a market fall, your crypto is not likely to be liquidated to secure a lender’s investment. Higher LTV means that you will have to act fast in case of an extraordinary market situation. The good news is that CoinLoan won’t give you a chance to miss out on this.

The LTV formula is:

LTV = (Loan Amount) / (Collateral Value)

If you want to count the amount of crypto you can borrow against your crypto, you should reverse the formula:

(Loan Amount) = LTV * (Collateral Value)

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