See how your collateral value and Loan-to-Value (LTV) ratio affect your rate, payment, and whether your loan could ever go underwater
Calculation History
No calculations saved yet.
Enter your collateral value, loan amount, and base rate. We'll estimate your Loan-to-Value ratio, an illustrative LTV-based rate adjustment, and whether the loan could ever exceed your collateral's value.
Loan & Collateral
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$
Depreciation Assumptions
Home Equity Details
$
Simplification: for Home Equity loans, the home's value is treated as static (flat) over the loan term - we don't model real-estate appreciation/depreciation, since that's genuinely unpredictable and out of scope for this tool.
Share/CD-Secured Details
Informational only - share/CD-secured loans are typically priced as "CD rate + 2-3%." Your pledged CD/savings balance is treated as static (it doesn't depreciate) over the loan term.
Collateral value is treated as static (flat) over the loan term for this collateral type.
These details are optional and only used to label your exported PDF/Excel/PNG report - nothing is sent anywhere, all fields stay in your browser.
Monthly Payment (LTV-Adjusted Rate)
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Loan-to-Value (LTV)
0.00%
Combined LTV (CLTV)
0.00%
Effective Rate
0.00%
Base: 0.00%
CD/Savings Rate (Reference)
0.00%
Total Interest
$0.00
Total Cost
$0.00
This loan does not become underwater during the loan term.
Loan Balance vs Collateral Value
Amortization & Collateral Value (Annual)
Year
Loan Balance
Collateral Value
Equity
This tool provides ILLUSTRATIVE estimates only. The LTV-based rate adjustment shown is a simplified educational model and does NOT reflect any specific lender's actual underwriting, which also depends on credit score, income, debt-to-income ratio, and lender-specific policy - none of which this tool collects. Defaulting on a secured loan risks loss of the pledged collateral (repossession for auto, foreclosure for home equity). Collateral depreciation/value projections are estimates only - actual resale or appraisal values vary.
This tab reuses the Loan Amount and Loan Term from the Secured Loan Calculator tab. Enter an illustrative rate markup for an equivalent unsecured loan to see the trade-off.
This default markup is an illustrative/typical estimate, not a quote. Unsecured personal loan rates vary widely by credit profile and lender.
Total Interest Savings (Secured vs Unsecured)
$0.00
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Secured vs Unsecured
Metric
Secured Loan
Unsecured Loan
Securing this loan against collateral typically lowers your rate and payment, but puts your collateral at risk if you default.
An unsecured loan has no collateral risk but usually costs more.
Educational estimate only, not professional financial advice. The unsecured rate shown is the secured loan's LTV-adjusted effective rate plus the illustrative markup entered above - actual unsecured personal loan offers depend heavily on your credit profile, income, and lender policy.
Pledging collateral against a loan typically earns you a lower interest rate, but how much lower depends heavily on your Loan-to-Value (LTV) ratio. This calculator estimates an LTV-adjusted effective rate for auto, home equity, and share/CD-secured loans, then compares the result against an equivalent unsecured loan so you can see exactly what the collateral is saving you.
How to use this secured loan calculator
Choose your collateral type: auto, home equity, or share/CD-secured.
Enter your loan amount, collateral value, base interest rate, and loan term.
Review your LTV (and Combined LTV, if applicable), Effective Rate, Monthly Payment, and Total Interest.
Check the Loan Balance vs Collateral Value chart to see whether the loan could become underwater.
Switch to the Secured vs Unsecured tab to compare against an equivalent unsecured personal loan.
What this secured loan calculator does
Lenders price secured loans partly based on how much equity cushion exists between the loan amount and the collateral’s value, a lower LTV means more cushion and less lender risk, which typically earns a lower rate. This calculator applies an LTV-based rate adjustment on top of your entered base rate to estimate that effective rate, then runs a standard amortization to produce your monthly payment and total interest.
For auto and general collateral, the calculator can project collateral value changes (depreciation) over the loan term. For home equity loans, the property value is treated as static (flat) over the loan term, since real-estate appreciation or depreciation is genuinely unpredictable and out of scope for a rate-estimation tool. For share/CD-secured loans, the pledged balance is likewise treated as static since it doesn’t depreciate the way a vehicle does, and these loans are typically priced informationally as “CD rate plus 2 to 3 percent.”
What “underwater” means and why it matters
A loan becomes underwater when the remaining loan balance exceeds the collateral’s value, meaning you owe more than the asset is currently worth. This matters most for depreciating collateral like vehicles: if you needed to sell the asset to pay off the loan, you’d come up short. The Loan Balance vs Collateral Value chart tracks both lines over the loan term so you can see if or when this crossover might occur.
Secured vs unsecured: the real trade-off
The comparison tab takes your secured loan’s LTV-adjusted effective rate and adds an illustrative markup (a default of 4 percentage points, adjustable) to estimate an equivalent unsecured personal loan’s rate. The resulting Total Interest Savings figure shows what pledging collateral is worth in dollar terms, but the trade-off is real: securing a loan against an asset typically lowers your rate and payment, but puts that asset at risk of repossession (auto) or foreclosure (home equity) if you default, while an unsecured loan carries no collateral risk but usually costs more.
Frequently asked questions
Why does a lower LTV get me a better rate?
A lower Loan-to-Value ratio means more of the collateral’s value cushions the lender against loss if you default, which is why lenders typically reward lower LTV with a lower interest rate. This calculator’s LTV-based rate adjustment models that relationship, though actual underwriting also depends on your credit score, income, and lender-specific policy.
What does it mean if my loan is “underwater”?
It means the remaining loan balance is higher than the collateral’s current value, so you’d owe more than the asset is worth if you needed to sell it. This is a bigger risk for depreciating collateral like vehicles than for assets the calculator treats as static, like home equity or a pledged savings balance.
Is a secured loan always better than an unsecured one?
Not necessarily, it typically gets you a lower rate, but it puts your pledged collateral at risk if you default, whereas an unsecured loan has no collateral risk but usually costs more in interest. The Secured vs Unsecured tab quantifies that trade-off in dollar terms for your specific numbers.
