What is DSCR and how is it calculated?

DSCR (Debt Service Coverage Ratio) is Net Operating Income divided by total debt service obligations. A DSCR above 1.25x is generally considered acceptable for lending; above 1.5x is considered strong.

What DSCR is required for MSME loans?

Most NBFCs and banks require a minimum DSCR of 1.1x–1.25x for MSME working capital loans. Term loans typically require 1.25x or higher.

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DSCR Estimator

What is DSCR?

Debt Service Coverage Ratio (DSCR) measures a borrower's ability to repay debt from operating income. A DSCR above 1.25x means the business generates ₹1.25 for every ₹1 owed — the standard threshold for MSME credit approval in India. Lenders use DSCR as a primary repayment capacity signal in working capital and term loan underwriting.

Estimate debt service coverage ratio instantly from revenue, margin, and repayment obligation inputs.

Enter Borrower Details

Monthly Revenue (INR)Operating Margin (%)Monthly Debt Service (INR)

Estimated DSCR

1.35x

Watch Zone

Net Operating Income₹2,70,000

Monthly Debt Service₹2,00,000

This is a directional estimate. Full underwriting requires verified bank statement analysis.

Methodology

How DSCR is Calculated

Conservative inputs based on industry benchmarks from lenders using Santulan.

Net Operating Income

Revenue multiplied by operating margin — the cash available before debt payments.

Debt Service

Sum of all principal and interest payments due in the analysis period.

Coverage Ratio

NOI ÷ Debt Service. Above 1.25x is generally acceptable; above 1.5x is strong.

Go Deeper

Verify DSCR from real bank data

Santulan computes DSCR from actual transaction data — not estimates. Get precise, bank-verified cash flow analysis.

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