Enter a possible loan and the cash available to repay debt. Then test what happens if cash falls or the interest rate is higher than planned.
Add the proposed loan, existing debt payments and monthly cash available for all debt. Move the two controls to see the payment gap or cushion in a tougher scenario.
Apply a reduction to the cash you entered above.
Price the same hypothetical loan at a higher rate. This does not reprice an existing fixed-rate contract.
The result will compare available cash with the proposed and existing monthly payments.
Use a month-by-month forecast to test whether the cash is actually available when payments fall due.
A coverage ratio at or above the entered planning target is a model result, not a lender's qualification threshold or approval.
The proposed payment uses level monthly principal and interest over the entered term. Existing monthly debt service is added separately. The model assumes the stated annual interest rate divided by 12 for monthly payments.
A ratio below 1.00× means the assumed monthly cash is less than modeled debt service. A higher planning target adds a buffer, but lenders use their own definitions, periods, tests and approval criteria.