What is loan to value ratio

The max loan-to-value (LTV) is set by lenders. LTV helps borrowers determine the maximum amount to borrow based on the collateral amount. For example, that LTV is 70% means that borrower is able to borrow a max amount of 70% collateral value. If borrower collateralizes 1000 FXCE, he can borrow a USDT amount which is equivalent to 700 FXCE.

Max LTV needs to satisfy:

• LTV < (1 - Stop out level),
• Stop out level must be >= 10%
• Therefore, Max LTV must be less than 90%

Example:

• Collateralizing 10 000 FXCE, Max LTV is 50% => Loanable amount is worth 5000 FXCE.
• 1FXCE = 0.511 USDT, you can borrow a maximum of 5000*0.511 = 2555 USDT

The collateral amount will be automatically calculated by FXCE system when borrower enters the borrowing amount & vice versa. In general, the calculation is as follows:

Borrowing amount = Collateral amount * Current exchange rate * LTV ratio

***Note: In borrowing interface, it's automatically filled in with 45% (5% less than the Max LTV). It is eligible for borrowers to adjust.