DSCR Calculator
Free DSCR calculator. Calculate Debt Service Coverage Ratio and assess loan eligibility. Essential tool for commercial real estate and business loan analysis.
About This Calculator
Debt Service Coverage Ratio (DSCR) is a critical metric used by lenders to evaluate a borrower's ability to repay loans. This calculator determines your DSCR and provides an assessment of whether it meets the standard minimum of 1.25x.
A DSCR above 1.25x indicates sufficient income to cover debt payments, while anything below signals potential risk to lenders.
Frequently Asked Questions
What is DSCR?
DSCR measures a company's ability to pay its debt obligations. DSCR = Net Operating Income / Total Debt Service. A DSCR of 1.25x or higher is typically required by lenders.
What is a good DSCR?
Most lenders require a minimum DSCR of 1.25x. 1.5x+ is strong, 2.0x+ is excellent. Below 1.0x is risky.
How to calculate DSCR?
DSCR = Net Operating Income / Total Debt Service. NOI is income after operating expenses but before debt payments.
What happens if DSCR is too low?
Below 1.0 means inability to cover debt payments. Lenders typically deny loans below 1.25x.
How to improve DSCR?
Increase NOI, refinance to lower rates, extend loan terms, pay down existing debt, or add income streams.
What is the difference between DSCR and debt-to-income ratio?
DSCR is for business loans, DTI is for personal loans. Both assess repayment capacity.