Does anyone know what a Loan to Value is on a car loan?

I'm doing a homework assignment and trying to research vehicle loan payments. But one of the criteria that the bank uses is what is called a %26quot;loan to value%26quot; some say 100% others say 90%. What does the 90% on a loan to value mean?

Does anyone know what a Loan to Value is on a car loan?

Loan to value means what percent of the value you may borrow. If you buy a $10,000 car and the loan to value is 90% you borrow $9,000 and pay a $1,000 down payment.

From the lender's perspective the higher the loan to value the riskier the loan because (1) the borrower has nothing to lose by not paying and (2) the probability that the value of the collateral will depreciate faster than the outstanding balance on the loan is gretaer. If that happens and the lender must repossess the collateral the lender still might not be able to recuperate the amount he is owed.

Does anyone know what a Loan to Value is on a car loan?

Loan to Value (LTV) basically means the percentage of the loan amount to the value of the vehicle. Many institutions will use a high retail value, not the private party resale value. Each institution will vary in their lending guidelines--often times, this will depend upon the borrower's credit situation, as well.

Does anyone know what a Loan to Value is on a car loan?

The amount borrowed compared to what the vehicle is worth.

Does anyone know what a Loan to Value is on a car loan?

A ratio that relates the maximum loan amount to the value of the car. If the has a 90% rule, they would loan up to 90% of the cost of the car to a qualified borrower. That means you would need 10% down, or equity in the car. It also describes a particular loan. If you paid 50% down, the loan to value would be 50%, and the high equity would likely earn you a better interest rate.

Does anyone know what a Loan to Value is on a car loan?

I work for a finance company. For car loans our loan to value is 80%. That means the amount of money we will loan you for a vehicle is 80% of the bluebook value. For example: You found a car to buy that has a bluebook value of 15,000.00. 80% of that is $12,000.00. Our loan to you would be $12,000.00.

Does anyone know what a Loan to Value is on a car loan?

simply put loan to value is the amount they will loan you compared to the value of the car. you said 90% ltv look at it this was a 100 dollar car with a 90% loan to value(ltv) mean they would loan you 90 dollars on the car

Does anyone know what a Loan to Value is on a car loan?

If you buy a car for 10,000 and put down 1,000 you would have a 90% loan to value, the car is worth $10,000 and you owe 90% or 9,000.

Does anyone know what a Loan to Value is on a car loan?

90% loan to value means they will loan up to 90% of the value of the item. The definition is the same for cars, houses, or anything else. If you buy from a dealer the promises to 'payoff your trade no matter how much you owe', you could wind up with a 150% loan to value. This is generally a terrible idea.