InvestorQ : Is there any limit to LTV that can be sanctioned to a customer?
Ashoka Patkar made post

Is there any limit to LTV that can be sanctioned to a customer?

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Ankita Patil answered.
3 years ago
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LTV ratio, or loan-to-value ratio is the ratio of the amount of loan that can be given to the total value of the property you are trying to take a loan against.

The LTV ceiling depends on quantum of the loan sought and is divided into slabs.

The RBI has allowed:

- up to 90% LTV, if the loan is up to Rs. 30 lakh

- up to 80% LTV, if the loan is between Rs. 30 lakh and Rs. 75 lakh

- a maximum of 75% LTV, for a loan higher than Rs 75 lakh

The various factors that impact LTV ratio are the applicant’s age, his/her credit score and his/her total liabilities

Do note: A higher LTV directly translates in to a higher equated monthly instalment (EMI), which means that you will end up repaying a larger amount to the lender, through EMIs.

It is advised that you opt for a smaller loan if you have sufficient funds for the down payment as you would be able to repay it easily. Later on, during the course of your loan tenure, if you accumulate excess funds, you can also use it to close your loan before your loan tenure.

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