DSCR Calculator 2026

DSCR = Net Operating Income (or EBITDA) / Total Debt Service, where debt service is annual principal plus interest. It measures how many times your cash flow covers your loan obligations in a year.

Each lender sets its own minimum, and many banks and NBFCs look for around 1.25 or more. Below 1.0 means cash flow does not cover the instalments and the loan will usually be declined. Project finance and commercial real estate lenders often ask for a bigger cushion.

Either raise net operating income or lower annual debt service. Extending the loan tenure reduces the annual instalment and improves DSCR immediately, though it raises total interest. Consolidating several high-rate loans into one longer-tenure facility often does both.

Lenders normally use EBITDA as the numerator, so depreciation and amortisation are added back — they are book entries, not cash leaving the account. Interest is added back too, because it sits in the denominator. The denominator is annual principal repayment plus interest on all loans, including existing term loans, equipment finance and the interest on a cash credit limit. Leaving out an existing EMI is the most common reason a self-calculated DSCR disagrees with the bank's.

Two numbers matter. Minimum DSCR is the worst single year across the loan tenure — lenders usually want it above 1.20, and it decides the sizing. Average DSCR is the mean over all years and is typically required above 1.35. A project averaging 1.6 but dipping to 0.95 in year three still fails, because that is the year the instalment cannot be paid. Banks also stress-test it against a 10% to 15% revenue drop.

Interest Coverage = EBIT / Interest, counting only interest. DSCR counts principal repayment as well, which is the amount that actually has to leave the bank. A company with Rs 60 lakh EBITDA, Rs 20 lakh interest and Rs 25 lakh principal has an interest cover of 3.0 but a DSCR of 60 / 45 = 1.33. The higher ratio looks comfortable; the DSCR is what tells you how close the repayment schedule really is.