debt service(redirected from Servicing a Loan)
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The amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds, or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt." An example of debt service is a monthly student loan payment. See also: Debt service coverage ratio.
Funds required to meet interest expenses, principal payments, and sinking fund requirements during a specific time period. A firm's ability to service its debt is estimated by comparing cash flow with debt service.
The amount necessary to make principal and interest payments on a loan.It does not include amounts collected each month as a reserve for insurance or real estate taxes and does not include payments for private mortgage insurance.