Finance Tools

Farm Loan Stress Test Calculator

Stress test a farm loan by simulating interest-rate increases and cash-flow drops to see how payments and DSCR change.

This tool simulates a rate shock and a cash-flow drop to see how your loan payment and DSCR change.

Loan details

Principal amount financed (not including down payment).

Typical ranges: 5–30 years depending on the loan type.

Nominal APR assumption. This uses standard amortization math.

Cash flow

Roughly: revenue − operating costs (before debt service). Use your most realistic base case.

Stress assumptions

Example: enter 2 to model 7% → 9%.

Example: 20 means NOI becomes 80% of baseline.

Results

Baseline monthly payment

$3,876.49

Annual debt service: $46,518

Stressed payment (7.00% → 9.00%)

$4,498.63

Annual debt service: $53,984

Payment change

+$622.14 / month (16.05%)

NOI under stress

$96,000 / year

Baseline DSCR

2.58

Heuristic: Comfortable

Stressed DSCR

1.78

Heuristic: Comfortable

Tip: Increase the rate shock or NOI drop to see worst-case outcomes.

How it works

  • Monthly payment is calculated with the standard amortization formula (principal, rate, term).
  • Stress-case payment uses: rate + rate shock.
  • Stress-case cash flow uses: NOI × (1 − NOI drop).
  • DSCR = Annual NOI ÷ Annual debt service (higher is safer).

FAQ

What DSCR is “safe”?
Many lenders prefer ~1.25+, but it varies by lender, collateral, and risk. Treat this as a stress signal, not a loan approval tool.

Does this include taxes or capex?
No. This is a simplified model using NOI. If your operation has large capex cycles, stress test NOI more aggressively.

What stress inputs should I try?
Common combos: +1–3% rate shock and −10–30% NOI drop (price drop, yield hit, cost spike).

How to use this farm loan stress test calculator

  1. Enter loan amount, interest rate, and term.
  2. Enter your annual net operating income (NOI) estimate.
  3. Set stress assumptions (rate increase, NOI drop).
  4. Compare baseline vs stressed monthly payment and DSCR.

Example

A farmer stress tests a $500,000 loan at 7% for 20 years with NOI $120,000/year and a +2% rate shock plus 20% NOI drop.

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