What is the DSCR/ FOIR you use?

Question

Accepted Answer

DSCR and FOIR are financial ratios used by credit managers to assess the creditworthiness of borrowers.

DSCR stands for Debt Service Coverage Ratio and measures a borrower's ability to repay their debt obligations.
FOIR stands for Fixed Obligation to Income Ratio and calculates the proportion of a borrower's income that goes towards fixed obligations like loan repayments.
Credit managers use DSCR and FOIR to evaluate the risk associated with lending to a borrower.
A higher DSCR indicates a better ability to repay debt, while a lower FOIR suggests a lower risk of default.
For example, a credit manager may require a minimum DSCR of 1.25 and a maximum FOIR of 40% for approving a loan application.

Accepted Answer

I was not accustomed to the these Terms but i was using a term called MLSE. It also denotes same EMI to income ratio

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