loan value: meaning, definition, pronunciation and examples
C1Formal; Financial
Quick answer
What does “loan value” mean?
The specific maximum amount a lender is willing to advance on a pledged asset.
Audio
Pronunciation
Definition
Meaning and Definition
The specific maximum amount a lender is willing to advance on a pledged asset.
The monetary worth of an item (e.g., a car, property, or securities portfolio) as determined by a lender for the purpose of securing a loan; often lower than the market or retail value to account for risk.
Dialectal Variation
British vs American Usage
Differences
No significant lexical differences. The concept is identical. 'Lending value' is a less common but possible synonym in both.
Connotations
Neutral financial/legal term in both regions.
Frequency
Equally common in professional financial contexts in both the UK and US.
Grammar
How to Use “loan value” in a Sentence
[Lender] determined the loan value of [Asset]The loan value of [Asset] is [Amount]Vocabulary
Collocations
Examples
Examples of “loan value” in a Sentence
verb
British English
- The broker will value your portfolio for loan purposes.
- They are currently valuing the property to establish its loan value.
American English
- The lender will appraise the car to determine its loan value.
- We need to value the securities for the loan.
adverb
British English
- [Not typically used as an adverb]
American English
- [Not typically used as an adverb]
adjective
British English
- The loan-value assessment came in lower than expected.
- We received a formal loan-value estimate.
American English
- The loan-value figure was non-negotiable.
- The loan-value calculation is stringent.
Usage
Meaning in Context
Business
The bank will only lend up to 80% of the vehicle's loan value.
Academic
The study analysed the correlation between asset volatility and its loan value in secured lending.
Everyday
I was surprised at how low the loan value of my watch was at the pawnshop.
Technical
The loan value is a critical input for calculating the loan-to-value (LTV) ratio and determining credit risk exposure.
Vocabulary
Synonyms of “loan value”
Strong
Neutral
Weak
Vocabulary
Antonyms of “loan value”
Watch out
Common Mistakes When Using “loan value”
- Using 'loan value' interchangeably with 'resale value' or 'book value'. Confusing 'What is its loan value?' with 'How much is the loan for?'.
FAQ
Frequently Asked Questions
No. Loan value is typically lower than market value. It is a conservative valuation used by lenders to mitigate risk if the borrower defaults.
Yes, it can apply to financial assets like stocks or bonds, where the loan value is based on their current market value minus a 'haircut' or discount.
The loan value is determined by the lender or a professional appraiser/valuer acting on the lender's behalf.
Loan-to-Value (LTV) is a ratio. It is calculated by dividing the loan amount by the loan value (or purchase price, whichever is lower) of the collateral asset. A lower LTV is less risky for the lender.
The specific maximum amount a lender is willing to advance on a pledged asset.
Loan value is usually formal; financial in register.
Loan value: in British English it is pronounced /ˈləʊn ˌvæljuː/, and in American English it is pronounced /ˈloʊn ˌvæljuː/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “[not commonly idiomatic]”
Learning
Memory Aids
Mnemonic
Think LOAN VALUE = LENDER'S VALUATION. It's the value from the lender's perspective for lending purposes only.
Conceptual Metaphor
VALUE IS A MEASURE OF SAFETY (The loan value measures how 'safe' the asset is as security for the lender).
Practice
Quiz
In which scenario is the term 'loan value' MOST appropriately used?