Question 1

What is DSCR in banking?

Accepted Answer

Debt Service Coverage Ratio = Net Operating Income / Annual Debt Service. A DSCR of 1.25 means the property generates 25% more income than needed to cover debt payments. Most commercial lenders require a minimum DSCR of 1.20-1.25 for loan approval.

Question 2

What is the difference between APR and interest rate?

Accepted Answer

Interest rate is the base cost of borrowing. APR (Annual Percentage Rate) includes the interest rate plus fees, points, and other charges, expressed as a yearly rate. APR gives a truer picture of the total cost of a loan and allows fair comparison between offers.

Question 3

What is a Basel III capital ratio?

Accepted Answer

Basel III requires banks to hold a minimum Common Equity Tier 1 (CET1) ratio of 4.5%, Tier 1 capital ratio of 6%, and total capital ratio of 8% of risk-weighted assets. Most major banks target CET1 ratios of 11-13% for buffer above regulatory minimums.

Question 4

Are these banking tools free?

Accepted Answer

Yes - completely free, no sign-up required. Results export to CSV or PDF.

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