DSCR Calculator 2026

Debt Service Coverage Ratio — the metric Indian banks use to underwrite SME and commercial loans.

Net Operating Income (annual)

₹

EBITDA-equivalent: revenue − operating costs, before interest, tax, depreciation.

New loan

Loan amount

₹

Principal you're applying for.

Interest rate

Annual rate from the lender.

Tenure

years

Existing obligations

Existing annual debt service

₹

Sum of yearly EMI payments on loans you already have. Set to 0 if none.

DSCR

Strong (≥ 1.5)

1.51×

NOI ₹50.00 L covers debt service of ₹33.06 L.

New loan EMI₹2.75 L / month

Annual surplus after debt₹16.94 L

Credit Underwriting

Debt Service Coverage Ratio (DSCR): The Primary Metric of Commercial Credit Underwriting

The Debt Service Coverage Ratio (DSCR) measures a commercial enterprise’s capacity to service its total debt obligations (principal repayment + interest expenses) from its net operating income. Indian commercial lenders mandate a minimum DSCR of 1.25x to 1.50x for business loan approval.

Standard Banking DSCR Formula

DSCR = Net Operating Income (EBITDA) ÷ Total Debt Service (Principal + Interest)

References

Financial Engineering

Debt Service Coverage Ratio (DSCR) FAQs

Essential underwriting insights for commercial borrowers and entrepreneurs.

What does a DSCR of exactly 1.0 mean for a business?

A DSCR of 1.0 indicates that the enterprise generates just enough operating cash to service its debt obligations with zero cushion for unexpected cost spikes, revenue dips, or working capital friction.

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