Loan-to-Value Ratio Calculator
Check if you’re upside-down on your car loan. Loan-to-value ratio (LTV) is the loan balance divided by the car’s current market value. Above 100% means you owe more than the car is worth — a risky position if you have an accident or need to sell.
Loan-to-Value (LTV) Calculator
Compare loan balance to current vehicle value and grade your equity position.
How It Works
New cars lose 20%+ of value the day you drive off the lot. With a small down payment and a long loan term, your loan balance can stay above the car’s value for the first 2–3 years. GAP insurance covers this gap if the car is totaled — but it doesn’t help when you simply want to sell or trade.
How to Use This Calculator
- Pull your current loan balance from your lender’s statement.
- Look up your car’s trade-in value at KBB or get a CarMax instant offer.
- Enter both into the calculator.
- The calculator returns your LTV and recommends action.
Worked Example
Reference Table
LTV bands and recommended action. Note that GAP insurance protects you only if the car is totaled — not if you voluntarily sell.
| LTV | Position | What to do |
|---|---|---|
| Under 70% | Healthy equity | Continue normal payments — refinance if rates drop |
| 70–90% | Moderate equity | On track — no special action needed |
| 90–100% | Marginal — break-even | Avoid extending the loan; consider extra principal |
| 100–110% | Mildly upside-down | Don’t trade in — pay extra principal monthly |
| 110–125% | Significantly upside-down | GAP insurance is essential; aggressive principal payoff |
| Over 125% | Severely upside-down | Likely from rolling old negative equity — break the cycle now |
Frequently Asked Questions
How do I get out of an upside-down loan?
Two paths: (1) Aggressive extra principal payments. Even $100/mo extra knocks 10–18 months off the loan and saves serious interest. (2) Drive the car until LTV crosses below 100% naturally — usually year 3–4 for typical loans.
Is being upside-down on a car loan dangerous?
Only if you need to sell or get into an accident without GAP insurance. The loan continues at the same payment whether the car is worth more or less than you owe.
Why am I upside-down right after buying?
New cars lose 20%+ in year 1, but a 5-year loan only pays down ~13% of the principal in year 1. The result: you’re underwater for 18–24 months on most new-car loans with under 15% down.
Can I refinance an upside-down auto loan?
Most lenders cap LTV at 110–130%. If you’re at 105–115%, some online lenders (LightStream, RefiJet) will refinance. Above 130%, no.
Should I roll negative equity into a new loan?
Almost never. You start the new loan already underwater, often by 20–30%. The next time you want to trade, you’re even deeper. The exception: an emergency replacement (totaled car, unreliable car) where the math is a wash.
