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Business Definition for: debt service
Dictionary of Finance and Investment Terms
debt service

cash required in a given period, usually one year, for payments of interest and current maturities of principal on outstanding debt. In corporate bond issues, the annual interest plus annual sinking fund payments; in government bonds, the annual payments into the debt service fund.

See also ability to pay
Dictionary of Banking Terms
debt service

  1. cash outlay needed to meet principal and interest payments on a mortgage or other note, usually expressed as a monthly or annual payment. Fixed rate consumer loans, including mortgages, are often referred to as constant payment obligations, as the regular payments needed to fully amortize the debt remain the same through the life of the loan.
  2. amount needed in a calendar year or fiscal year to meet bond interest payments, retire the principal on maturing bonds, or make payments to a sinking fund.

Dictionary of Business Terms
debt service

cash required in a given period, usually one year, for payments of interest and current maturities of principal on outstanding debt. Debt service in mortgage loans includes interest and principal; in corporate bond issues, the annual interest plus annual sinking fund payments; in government bonds, the annual payments into the debt service fund.

See also ability to pay
Dictionary of Real Estate Terms
debt service

the periodic payments, generally principal and interest, made on a loan.

See also annual debt service
Related Terms:
ability to pay

Finance: borrower's ability to meet principal and interest payments on long-term obligations out of earnings. Also called ability to service. See also fixed-charge coverage.
Industrial relations: ability of an employer, especially a financial organization to meet a union's financial demands from operating income.
Municipal bonds: issuer's present and future ability to generate enough tax revenue to meet its contractual obligations, taking into account all factors concerned with municipal income and property values.
Taxation: the concept that tax rates should vary with levels of wealth or income; for example, the progressive income tax.

ability to pay

Finance: borrower's ability to meet principal and interest payments on long-term obligations out of earnings. Also called ability to service. See also fixed-charge coverage.
Industrial relations: ability of an employer, especially a financial organization to meet a union's financial demands from operating income.
Municipal bonds: issuer's present and future ability to generate enough tax revenue to meet its contractual obligations, taking into account all factors concerned with municipal income and property values.
Taxation: the concept that tax rates should vary with levels of wealth or income; for example, the progressive income tax.

annual debt service

required annual principal and interest payments for a loan. In corporate finance, the cash required in a year for payments of interest and current maturities of principal on outstanding debt.

Referring Terms:
Principal and Interest payment (P&I)
Copyright © 2006, 2003, 1998, 1995, 1991, 1987, 1985 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright c 2006, 2000, 1997, 1993, 1990 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
 Copyright © 2004, 2000, 1997, 1993, 1987, 1984 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
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