Debt Service

Debt Service
The cash that is required for a particular time period to cover the repayment of interest and principal on a debt. Debt service is often calculated on a yearly basis. Debt service for an individual often includes such financial obligations as a mortgage and student loans. Companies may have outstanding loans or outstanding interest on bonds or the principal of maturing bonds that count towards the company's debt service. An individual or company that is not able to make payments to service the debt can be said to be "unable to service (his/her/its) debt."

For example, a property developer is said to be "servicing a lot of debt" when he or she has made a large investment in a property and has not yet sold many of the subdivided lots or individual units. The debt service is simply how much money is owed on a loan, including both the interest and the principal amounts. Individuals seeking loans from banks and other lenders are often required to list their entire debt service (the amount of all outstanding loans and financial obligations) on an income statement (a profit and loss statement).


Investment dictionary. . 2012.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • Debt service — may refer to: Interest payable on debt, especially on government debt Debt service ratio Debt service coverage ratio External debt Developing countries debt Credit analysis Bureau of the Public Debt …   Wikipedia

  • debt service — debt ser·vice n: the amount of interest and principal payments due annually on long term debt Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • Debt service — Interest payment plus repayments of principal to creditors, that is, retirement of debt. The New York Times Financial Glossary * * * debt service ˈdebt ˌservice also ˈdebt ˌservicing noun [uncountable] FINANCE when a company, government, or… …   Financial and business terms

  • debt service — A term used to refer to the amount of principal and interest payments required by a borrower s loans or securities issued. Also used as a verb to describe making such payments. American Banker Glossary interest payment ( interest payments) plus… …   Financial and business terms

  • debt service — noun : the amount of interest and sinking fund payments due annually on long term debt * * * debt servicing. the amount set aside annually in a fund to pay the interest and the part of the principal due on a debt. * * * debt service, the total… …   Useful english dictionary

  • debt service ratio — ➔ ratio * * *    The proportion of a country s export earnings needed to cover interest and principal repayments of its foreign debts, particularly those owed by the public sector. A level of 20 percent is normally considered an acceptable… …   Financial and business terms

  • debt service coverage — ( DSC) The margin by which all of a borrower s or bond issuer s required principal payments (not just those for the loan under consideration or just those for loans to one bank) are exceeded by the sum of the firm s cash flow plus all of the… …   Financial and business terms

  • debt service — debt servicing. the amount set aside annually in a fund to pay the interest and the part of the principal due on a debt. * * * …   Universalium

  • Debt service coverage ratio — The debt service coverage ratio (DSCR), also known as debt coverage ratio, is the ratio of cash available for debt servicing to interest, principal and lease payments. It is a popular benchmark used in the measurement of an entity s (person or… …   Wikipedia

  • Debt service ratio — In economics and government finance, debt service ratio is the ratio of debt service payments (principal + interest) of a country to that country’s export earnings.[1] A country s international finances are healthier when this ratio is low. The… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”