DeFi Loan LTV Calculator
Loan-to-value (LTV) is the most direct measure of risk in a DeFi collateralized lending position. It expresses your outstanding debt as a percentage of your collateral value. A high LTV means you are close to the liquidation threshold; a low LTV means you have ample buffer. This calculator takes your current borrowed amount and collateral value, and shows your current LTV, your borrowing headroom before reaching a user-specified maximum LTV, and the additional amount you can safely borrow. Use it to manage your position risk and plan incremental borrowing safely.
DeFi LTV formula
LTV (%) = Borrowed / Collateral Value * 100
Headroom = Collateral Value * (Max LTV / 100) - Borrowed
Example: $3,000 borrowed, $10,000 collateral, 75% max LTV. LTV = 30%. Headroom = $10,000 * 0.75 - $3,000 = $4,500 additional borrowing capacity.
Managing DeFi loan LTV safely
- Target LTV 20-30% below maximum: this gives you a price cushion before reaching the liquidation threshold. For a 75% max LTV, target staying below 50-55%.
- Set price alerts: configure alerts when collateral price falls to a level that would push your LTV above 70% of maximum. This gives time to repay or add collateral.
- Stable collateral: using stablecoins as collateral eliminates price drop risk on the collateral side, allowing higher LTV with less monitoring required.
- Account for accruing interest: borrowed amounts grow over time due to interest. Monitor your position's LTV regularly, not just at inception.
DeFi loan LTV: frequently asked questions
What is loan-to-value (LTV) in DeFi?
LTV is the ratio of the value borrowed to the value of the collateral: LTV = Borrowed / Collateral Value * 100. A lower LTV means a safer position. Most DeFi protocols set a maximum LTV of 50-80% depending on collateral type.
What happens when LTV reaches the maximum?
When your LTV reaches the protocol's maximum (also called the liquidation LTV), your position becomes eligible for liquidation. A liquidator repays your debt and claims your collateral at a discount. This is why maintaining a comfortable buffer below maximum LTV is essential.
How does LTV relate to collateralization ratio?
LTV and collateralization ratio (CR) are inverse metrics. CR = Collateral / Debt * 100, while LTV = Debt / Collateral * 100. An LTV of 60% equals a CR of 167%. They measure the same risk from different directions.
What is the maximum safe LTV?
This depends on the protocol's liquidation LTV and the volatility of the collateral asset. For ETH on Aave, the liquidation threshold is around 82.5%. A prudent borrower might target an LTV of 50-60% to maintain a 20-30% buffer. For volatile altcoins, targets should be much lower.
Can I calculate how much more I can borrow?
Yes: Additional Borrow = Collateral Value * (Max LTV / 100) - Current Debt. This calculator shows this as borrowing headroom. If you are at LTV 50% with a 75% max, your headroom is Collateral * 0.25.
Official sources
- Aave: Aave Protocol FAQ.
- Compound Finance: Compound Protocol Documentation.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.