Debt Service Coverage Ratio (DSCR) Calculation Guide
Debt Service Coverage Ratio (DSCR) is the single most critical financial metric evaluated by credit managers to assess a business's ability to service monthly principal and interest repayments on term loans.
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The Banking DSCR Formula
- • DSCR < 1.0: Operating cash flows are insufficient to pay debt obligations. Bank loan will be rejected.
- • DSCR 1.25 to 1.50: Minimum acceptable threshold for most Indian public and private sector banks.
- • DSCR 1.50 to 2.0+: Benchmark range ensuring comfortable repayment capacity and favorable interest rates.
How Acharya Optimizes Financial Ratios for Loan Approval
If your proposed project report shows a low DSCR, our financial analysts assist in restructuring term loan tenures, adjusting promoter equity contribution, or reallocating depreciation schedules to present a realistic and bank-compliant credit profile.
Checking Loan Eligibility for Your Project?
Calculate exact DSCR and debt capacity with our chartered accountant advisory team.
Calculate Loan DSCR