Loan-to-value and settlement: the two numbers every SOL borrower should know
LTV tells you how big your loan is compared to your collateral. The settlement line tells you when the loan is closed from that collateral. Understand both and you will never be surprised.
By Luindy Editorial5 min read
Every SOL loan on Luindy is governed by two percentages. Learn them once and the borrow page will make complete sense. Asset-backed stablecoin loans work differently: they have a fixed repayment schedule agreed with you, and no loan-to-value line.
Loan-to-value (LTV)
LTV = loan value ÷ collateral value. Borrow $500 of SOL against 1,000 USDC and your LTV is 50%. The maximum LTV is the highest ratio at which you can open a loan; on Luindy it is 50%. Because your collateral is a stablecoin, LTV only moves when the price of SOL moves.
The settlement line
The settlement line is a higher LTV, 85%, at which Luindy closes the loan from your collateral to protect the pool. The gap between 50% and 85% is your buffer: SOL can rise 70% from the moment you open a maximum-size loan before settlement begins. Open smaller and the buffer grows.
Two warnings first
We email you when your LTV crosses 65% and again at 75%. Each message shows exactly how much SOL to repay to bring the loan back under the maximum. Repayment takes seconds from the loan screen.
| Line | LTV | SOL price move from a max-size loan |
|---|---|---|
| Open up to | 50% | — |
| First warning | 65% | +30% |
| Second warning | 75% | +50% |
| Settlement | 85% | +70% |
What settlement actually looks like
Luindy does not keep everything. It keeps enough of your stablecoin collateral to cover the SOL you owe plus a 5% fee, and returns the rest to your wallet in the same transaction. The loan is closed and there is nothing further to repay. The same happens if a term ends with the loan unpaid.