understanding loan-to-value ratio

Loan-to-value (LTV) is the ratio of the loan amount to the collateral value used to secure it. In crypto lending, including BTC-backed loans on Sats Terminal Borrow, LTV ratios indicate how much you can borrow against your BTC without triggering liquidation. The term 'loan-to-value' is part of financing terminology that also appears in real estate loans, reflecting risk and leverage. Sats Terminal aggregates offers from DeFi and CeFi lenders, making LTVs and liquidation thresholds visible before you commit, so you can compare terms across non-custodial and custodial models. A higher LTV increases borrowing power but raises liquidation risk as market moves impact collateral value. Conversely, lower LTVs reduce risk and may yield more favorable terms over time. By understanding LTV, borrowers can balance liquidity needs with exposure to price volatility in both crypto lending and traditional financing contexts.