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Debt Service
Debt service is the amount needed for scheduled debt payments over a stated period, including principal and interest.
Debt service is the amount needed for scheduled debt payments over a stated period, including principal and interest. Some financing structures also include required sinking-fund payments in the reported measure.
Property operations example: label the loans, payment components, and reporting period included in a debt-service total. Keep that payment amount distinct from the property's operating expenses and from a coverage ratio.
Source: California Debt and Investment Advisory Commission, Debt Financing Guide, Debt Service.
Frequently Asked Questions
Is debt service the same as a debt-service coverage ratio?
No. Debt service is a payment amount. A coverage ratio compares a defined income measure with debt service for a comparable period.
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