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Debt Service Coverage Ratio (DSCR) Calculator

Understanding DSCR

The Debt Service Coverage Ratio (DSCR) is a critical metric lenders use to evaluate a borrower’s ability to repay loan obligations. It measures the relationship between a business’s net operating income (NOI) and its annual debt service (loan payments).

A DSCR greater than 1.0 indicates that a borrower generates enough income to cover their debt obligations, while a DSCR less than 1.0 signals insufficient income. For example:

  • A DSCR of 1.25 means a business generates 25% more income than is needed to cover debt payments.
  • A DSCR of 0.9 means the income is only 90% of the required debt payment.

Use the calculator below to determine your DSCR and loan affordability.

Loan Calculator Services

DSCR Calculator

Use this tool to calculate your Debt Service Coverage Ratio (DSCR) and debt payments.

Step 1: Debt Service Calculation

Step 2: DSCR Calculation

Ready to take the next step? Use the DSCR calculator above to determine your financial standing and contact us to discuss your loan options.

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Frequently Asked Questions (FAQs)

Most lenders require a DSCR of 1.20–1.30 or higher to qualify for financing.

You can improve your DSCR by increasing NOI (through higher revenue or lower expenses) or by lowering debt service via refinancing at a better rate or longer term.

Yes—DSCR is used in both commercial real estate and business financing to assess repayment capacity.