Loan-to-value, usually shortened to LTV, is the single most important figure in a crypto-backed loan. It describes the relationship between your loan amount and the market value of your pledged coins. Understand LTV and you understand how much you can borrow and how price moves affect your collateral.
Key takeaways
- LTV is the ratio of the loan amount to the market value of the collateral, expressed as a percentage.
- At Trade Lend, 50% is the standard, 60% is a warning zone and 70% is a high-risk range — up to 70% is possible for Bitcoin.
- When the price falls, LTV rises. We prioritize communication and provide multiple notifications before any manual collateral action is considered — never automatically or silently.
What is loan-to-value (LTV)?
Loan-to-value literally means the loan relative to the value, and it puts two numbers into a ratio: the loan amount paid out and the current market value of the pledged coins. The result is shown as a percentage. A low LTV means a large safety buffer; a high LTV means the loan makes up a large share of the coin value.
- Loan-to-value (LTV)
- The ratio of the loan amount to the market value of the collateral, as a percentage. Also called the collateral ratio.
- Borrowing capacity
- The portion of the coin value that can be paid out as a loan. It is the market value multiplied by the permitted loan-to-value.
- Safety buffer
- The gap between your current LTV and the ceiling. The larger the buffer, the more of a price drop you can absorb before the LTV becomes critical.
- Adding collateral
- Pledging additional coins to restore more buffer when the LTV rises.
How LTV is calculated
The calculation follows a simple formula:
Suppose you pledge coins worth 10,000 US dollars in market value and take out a loan of 5,000 US dollars. The LTV is then: 5,000 ÷ 10,000 × 100 = 50%. At Trade Lend the loan value is tracked in US dollars throughout, even when the payout is made in USDT, USDC, BTC or ETH.
| Market value of collateral | Loan amount | LTV |
|---|---|---|
| 10,000 US dollars | 5,000 US dollars | 50% |
| 10,000 US dollars | 6,000 US dollars | 60% |
| 10,000 US dollars | 7,000 US dollars | 70% |
The LTV tiers at Trade Lend
Trade Lend works with clearly defined LTV tiers. They make it transparent at all times where your loan stands and when a response makes sense. Importantly, none of these tiers triggers an automatic sale — any action on collateral is manual and communicated in advance.
| LTV tier | Meaning | What it means for you |
|---|---|---|
| 50% | Standard | The usual level when taking out a loan, with a large safety buffer. |
| 60% | Warning zone | The buffer is getting smaller. A good moment to add collateral or repay part of the loan. |
| 70% | High risk / maximum | The highest level when taking out a loan, for example for Bitcoin. Little room for further price drops. |
Loan-to-value by coin
The permitted loan-to-value depends on the coin. More is possible for less volatile assets such as Bitcoin than for more volatile coins. You can see which level applies to your coins in the loan calculator.How price moves change your LTV
The loan amount stays the same in US dollars — but the market value of your collateral moves with the price. So every price move changes your LTV, even if you do nothing. When the price rises, the LTV falls and the buffer grows. When the price falls, the LTV rises.
| Price change of collateral | New market value | Loan (unchanged) | New LTV |
|---|---|---|---|
| Starting point | 10,000 US dollars | 5,000 US dollars | 50% |
| minus 17% | 8,300 US dollars | 5,000 US dollars | around 60% |
| minus 29% | 7,100 US dollars | 5,000 US dollars | around 70% |
Price risk remains
A crypto loan does not remove your price risk. The value of your coins can rise or fall at any time. If it falls, you either need more collateral or you repay part of the loan to bring the LTV back down.What happens as LTV rises
If your LTV rises, you are not caught off guard. Trade Lend relies on communication and several stages of notification before any action is even considered. The process is deliberately designed to leave enough time to work out a solution together.
- From the warning zone (60%): you receive a note that the buffer is getting smaller.
- In the high-risk range (70%): we notify you more clearly and show you options to add collateral or repay part of the loan.
- Around 80 to 85%: we proactively reach out to find a joint solution.
- As a last resort: a manual action on collateral is only considered after a prolonged breach toward around 95% — and always only after communication.
Our approach to collateral
We never sell collateral silently or automatically. We prioritize communication and provide multiple notifications before any manual collateral action is considered. Every decision stays transparent and agreed.How to lower your LTV
Your LTV is always in your own hands. Two routes get you there, and you can also combine them.
Add collateral
- You pledge additional coins as collateral.
- The market value of the collateral rises and the LTV falls.
- Your loan amount stays the same — you keep your full liquidity.
Repay part of the loan
- You repay part of the loan — at any time and with no prepayment penalty.
- The loan amount falls, and so does the LTV.
- Interest accrues daily; repaying earlier reduces the interest cost.
Both routes widen the safety buffer. Which one fits better depends on whether you have additional coins available or would rather reduce the outstanding loan balance.
LTV at Trade Lend at a glance
At Trade Lend you pledge BTC, ETH, SOL, XRP, BNB or LTC as collateral and receive your payout in USDT, USDC, BTC or ETH. You repay in the same asset that was paid out. The loan value is tracked in US dollars throughout.
- Loan-to-value: up to 50% of market value by default, up to 70% for Bitcoin.
- LTV tiers: 50% standard, 60% warning zone, 70% high risk.
- Terms: flexible with no fixed term (variable rate) or fixed over 30, 90, 180 or 365 days.
- Repayment: at any time with no prepayment penalty; interest accrues daily.
Want to see the LTV that applies to your coins? Run the numbers in the loan calculator or start your application directly. For more on the loan itself, read the guide What is a crypto loan?, and if you want to borrow against Bitcoin up to the maximum, see Borrowing against Bitcoin at up to 70% LTV.
Frequently asked questions
An LTV of 50 percent means the loan amount is half the market value of your pledged coins. With collateral worth 10,000 US dollars, that is a loan of 5,000 US dollars. At Trade Lend, 50 percent is the standard level when you take out a loan.
At Trade Lend the maximum loan-to-value when taking out a loan is up to 70 percent, for example for Bitcoin. 60 percent is treated as a warning zone and 70 percent as a high-risk range. The more stable a coin, the higher the possible level.
No. We prioritize communication and provide multiple notifications before any manual collateral action is considered. If the LTV rises, we notify you; around 80 to 85 percent we proactively reach out to find a joint solution. There is no automatic or instant sale.
You can add more coins as collateral or repay part of the loan. Both reduce the ratio of the loan amount to the collateral value. At Trade Lend repayment is possible at any time with no prepayment penalty.
The loan value is tracked in US dollars throughout, even when the payout is made in a cryptocurrency. The LTV is the US-dollar loan amount relative to the US-dollar market value of your collateral.
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This article is for general information only and does not constitute investment, legal or tax advice. Crypto loans carry risks, including price fluctuations of the collateral.