Free tool
Debt service coverage ratio calculator
Overview
See whether the income of a business or property covers its loan payments. Enter yearly net operating income and yearly principal and interest payments.
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How it works
How it works
DSCR is net operating income divided by total yearly debt service (principal plus interest). A ratio of 1 means income exactly covers the payments. Lenders set their own minimums, so ask yours what it requires.
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FAQ
About this calculator
What is a good DSCR?
Lenders choose their own minimums, and they differ by loan type and lender. Many want a cushion above 1, often written as 1.25 or higher. Ask your lender how it calculates the figure.
What counts as net operating income?
Revenue minus operating expenses, before interest, income taxes and usually before depreciation. Lenders may adjust it, so confirm which version they use.
Does this approve or deny a loan?
No. It is a general calculator. A lender decides based on its own rules and review.
Is anything saved?
No. The math runs in your browser and nothing you enter is sent to us.
Is this tax or financial advice?
No. It is a calculator for general information. Check the numbers against your own records, and ask an accountant before you act on them.
Related: interest coverage ratio calculator, debt to equity ratio calculator. See all free tools. More free tools: Receivables turnover calculator, Operating margin calculator, Compound interest calculator, or see all free tools.
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Excel workbook
Rental Property Deal Analyzer
Enter the price, financing, rent and expenses and see cash flow, cap rate, cash-on-cash return and coverage, with best, expected and worst cases side by side.
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