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Debt Service Coverage Ratio (DSCR)

Every lender asks for it. Most developers calculate it wrong. Enter your project's income and debt obligations — see your DSCR, what lenders will think, and the income gap to hit their threshold.

Income
Rental / Project Income (₹ Cr / year)Rental income, lease income, or projected sales collections from the project per year.
Other Operating Income (₹ Cr / year)
Operating Expenses
Total Operating Expenses (₹ Cr / year)Maintenance, management fees, insurance, property tax — excluding loan payments.
Annual Debt Service
Annual Interest Payment (₹ Cr)
Annual Principal Repayment (₹ Cr)
Target DSCRMost lenders require 1.25× minimum. Conservative lenders require 1.5×.
Your DSCR
0.86×
Weak — likely rejected
Total gross income₹1,20,00,000
Operating expenses− ₹30,00,000
Net Operating Income (NOI)₹90,00,000
Annual debt service₹1,05,00,000
To achieve 1.5× DSCR target
NOI required₹1,57,50,000
Income shortfall− ₹67,50,000
Lender DSCR thresholds
Strong (lenders prefer)≥ 1.5×
Acceptable1.25× – 1.49×
Weak — likely rejected< 1.25×

DSCR — what lenders actually look at

  • Formula: DSCR = Net Operating Income ÷ Total Annual Debt Service
  • 1.0×: Break-even. Every rupee of income goes to debt. Lenders won't touch this.
  • 1.25×: The floor most lenders accept for secured construction finance.
  • 1.5×+: Where lenders get comfortable. This is the number to target in your initial underwriting.
  • Common mistake: Developers include projected sales collections as income before RERA approvals and launch. Lenders typically use contracted, verified income — not projections.

DSCR below threshold? There are options.

A lower DSCR doesn't always mean no deal — it means the structure needs to change. Longer tenure, senior-junior layering, or partial pre-sales can reframe the numbers. We've done this before.

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