Enter your Current Loan Balance, Current Vehicle Value, Vehicle Year, and Vehicle Mileage to calculate your Loan-to-Value Ratio and find out whether you're sitting on positive Vehicle Equity or underwater on your loan — plus a quick read on your Refinance Outlook.
Loan-to-Value Ratio
--
Vehicle Equity
--
Equity Status
--
Refinance Outlook
--
The loan-to-value ratio is a comparison of your vehicle's current market value to how much you still owe on the loan. It's calculated by dividing your loan balance by the vehicle's value and expressed as a percentage.
Generally, an LTV ratio below 100% is ideal for refinancing, as it means you have positive equity. Ratios between 100-125% may still qualify for refinancing with some lenders, while ratios above 125% can make refinancing more challenging.
Negative equity occurs when you owe more on your loan than your vehicle is worth (LTV above 100%). This is also called being 'upside down' or 'underwater' on your loan. It's common in the first few years of a loan due to depreciation.
You can improve your LTV ratio by making extra principal payments to reduce your loan balance, or by maintaining your vehicle well to preserve its value. Time also helps as you make regular payments.
Refinancing with negative equity is possible but may be limited to certain lenders and could require higher interest rates. Consider if the new terms still provide monthly payment savings or other benefits.
It's wise to check your LTV ratio annually or when considering refinancing. Vehicle values can fluctuate based on market conditions, mileage, and condition, affecting your equity position.
Key factors include vehicle age, mileage, condition, maintenance history, accident history, market demand, and seasonal trends. Regular maintenance and careful driving help preserve value.