Cryptocurrency Q&A
What is a good collateral ratio?
What is a good collateral ratio?
Daniele
Wed Oct 23 2024
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7 answers
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I'm considering taking out a loan and I need to understand what a good collateral ratio is. I want to ensure that I'm not putting myself at risk by borrowing more than I can afford to repay, so understanding this ratio is crucial.
7 answers
ShintoBlessed
Fri Oct 25 2024
The ratio serves as an indicator of the safety measure a lender possesses.
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Riccardo
Thu Oct 24 2024
A collateral coverage ratio between 1.0 and 1.6 is generally sought.
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Riccardo
Thu Oct 24 2024
This range ensures that the collateral's value is sufficient to cover the loan.
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GinsengBoostPowerBoost
Thu Oct 24 2024
In the event of a borrower defaulting on a loan, this ratio becomes crucial.
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Daniele
Thu Oct 24 2024
By maintaining this ratio, lenders mitigate the risk of losses.
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