How this calculator works
DSCR is the test banks use to decide how much you can borrow: cash profit divided by all loan repayments due in the year. Most lenders want at least 1.25× to 1.5×.
Enter your EBITDA and existing EMIs to see your DSCR with a new loan, and the largest loan that still passes your bank’s minimum.
Formula
Worked example
A firm with ₹48 lakh EBITDA and ₹12 lakh of existing EMIs wants a ₹60 lakh, 5-year loan at 11%. The new EMIs are about ₹15.7 lakh a year, so DSCR falls to 1.74×, still above 1.25×. At 1.25× it could borrow about ₹1 crore.
Things to watch
- Banks often use PAT plus depreciation plus interest; check which definition your lender uses.
- A longer tenure lowers EMIs and raises DSCR, at the cost of more interest.
- Lenders look at average DSCR across the projection years and the lowest year.
Questions
What is a good DSCR?
Above 1.25× is the usual bank minimum for MSME loans; above 1.5× gives comfortable headroom.
What counts as debt service?
All principal and interest due in the year, including vehicle loans, term loans and interest on working capital limits.
Does DSCR use EBITDA?
Often yes for quick checks. In project reports banks usually use net profit + depreciation + interest.
Can I improve DSCR quickly?
Extend tenures, refinance high-cost loans, or cut owner drawings that reduce cash profit.
For planning and education only, not tax, legal or investment advice. Last reviewed 2026-10-31.