Loan-to-value ratio (LVR, also called LTV) measures how much you borrow compared with the value of the home, car, or other asset securing the loan. [CFPB](https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-to-value-ratio-and-how-does-it-relate-to-my-costs-en-121/)

LVR = (Loan amount ÷ Asset value) × 100

For a home or car valued at $50,000:

| LVR | Loan amount | Your contribution toward the price |
|---|---:|---:|
| 80% | $40,000 | $10,000 |
| 85% | $42,500 | $7,500 |

If you want to borrow $50,000 at 80% LVR, the asset would need to be valued at $62,500: $50,000 ÷ 0.80 = $62,500. If the purchase price is also $62,500, you would contribute $12,500, plus any fees and taxes.

A lender advertising a maximum LVR of 80% can finance up to 80% of the asset’s accepted value. That percentage describes the borrowing limit, not the interest rate.

LVR applies in India too, where it is usually called LTV. Indian lenders use it for home loans, with limits that depend on the loan amount, applicable rules, and lender policy. An 80% or 85% limit does not apply to every loan. [ICICI Bank](https://www.icici.bank.in/personal-banking/blogs/loan/home-loan/loan-to-value)

The calculation is the same in rupees: a ₹40 lakh loan against a home valued at ₹50 lakh has an 80% LTV. An unsecured personal loan has no pledged asset to use in this calculation.