The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

LOAN VALUE Definition & Legal Meaning

Definition & Citations:

Maximum monies a lender values for a collateral asset to secure a loan. Lenders accept assets as a collateral that appraise at a minimum liquidation value of 25 percent higher than the loan amount. The difference between a collateralized asset’s market value and loan advance amount is known as the haircut. The overage is to cover liquidation and other charges in case of a foreclosure.

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