# Loan-to-Value (LTV) Ratio

**LTV Formula:**

```
LTV = Loan Amount / (Total Collateral Value * 80)
```

* **Loan Amount** is the amount borrowed.
* **Total Collateral Value** is the sum of the values of the assets deposited as collateral.

For example, if a borrower deposits $10,000 worth of ETH, they can borrow up to 80% of their borrowing asset i.e  **$8,000** USDT.

* **Maintaining a Healthy LTV**: Keeping your LTV within safe limits helps protect against liquidation and ensures you can repay your loan without losing collateral.
