Loan-to-Value Ratio
Loan-to-Value Ratio (LTV) is a basic measurement used in pawn shops to decide how much money to lend against an item. Think of it as a safety percentage - if someone brings in an item worth $100 and the shop uses a 60% LTV, they would lend up to $60. This helps shops make smart lending decisions and ensures they can recover their money if the customer doesn't return. Pawn shops usually keep their LTV ratios lower on risky items and higher on stable ones like gold. Similar terms you might see are "advance rate" or "collateral ratio."
Examples in Resumes
Consistently maintained profitable Loan-to-Value Ratio standards while processing over 200 pawns monthly
Developed training materials for new employees on LTV assessment procedures
Accurately evaluated jewelry and luxury items to determine appropriate Loan-to-Value percentages
Typical job title: "Pawn Brokers"
Also try searching for:
Where to Find Pawn Brokers
Professional Organizations
Online Communities
Job Boards
Example Interview Questions
Senior Level Questions
Q: How do you determine appropriate Loan-to-Value ratios for different types of merchandise?
Expected Answer: A senior pawnbroker should explain how they consider market trends, item condition, resale potential, and risk factors when setting LTV rates. They should also mention how they train others on proper valuation.
Q: How would you adjust LTV ratios during economic downturns?
Expected Answer: Should discuss monitoring market conditions, adjusting ratios based on risk, maintaining profitability while staying competitive, and explaining these decisions to staff and customers.
Mid Level Questions
Q: What factors do you consider when setting an LTV for gold jewelry?
Expected Answer: Should mention checking current gold prices, evaluating purity, weighing the item, considering workmanship, and explaining how these factors affect the loan amount.
Q: How do you explain LTV ratios to customers who think their items are worth more?
Expected Answer: Should demonstrate customer service skills, ability to explain valuation process clearly, and maintain professional composure when dealing with disappointed customers.
Junior Level Questions
Q: What is a Loan-to-Value ratio and why is it important?
Expected Answer: Should be able to explain that LTV is the percentage of an item's value that can be loaned, and why it helps protect the business from losses.
Q: If an item is worth $1000, and your LTV is 60%, how much would you loan?
Expected Answer: Should quickly calculate that the maximum loan would be $600 and explain why this leaves room for resale profit and expenses if the loan defaults.
Experience Level Indicators
Junior (0-1 years)
- Basic understanding of LTV calculations
- Simple item evaluation
- Understanding store policies
- Basic customer service
Mid (1-3 years)
- Advanced item valuation
- Market trend awareness
- Customer negotiation
- Training new staff on LTV policies
Senior (3+ years)
- Setting store LTV policies
- Risk management
- Market analysis
- Staff management and training
Red Flags to Watch For
- Unable to explain basic LTV calculations
- No experience with item valuation
- Poor understanding of market values
- Lack of basic math skills
