How You Can Benefit from Military Interest Rate Reduction

Military interest rate reduction may give aid in times of financial distress for our modern day heroes. This special reduction is under the provision of the Service Members Civil Relief Act and may include mortgages, credit cards and car loans.

In compliance with the SCRA, creditors should apply a cap of 6% interest applied to loans. This may help take off some financial burden from soldiers who are currently in active military duty.

Under the conditions of SCRA, the following should be noted by a soldier in active service in order to expedite applications for interest reduction:

• Debts that are qualified for the interest rate reduction should have been acquired before starting active duty.
• The service member must give his creditor a written notice as well as copy of military orders which calls him for military service or active duty. These written proofs should be given not later than 180 days after the service member’s release or termination from military service.
• The interest rate cap is 6% on financial obligations or debts with the exemption of federally guaranteed student loans.
• The creditor will decrease the service member’s interest rate up to 6% upon the receipt of notice. This will take effect on the service member’s first day of active duty.
• No interest above 6% will be claimed while the service member is on active duty or once he leaves active duty except when the court rules. Thus, the amount of interest above 6% is forgiven for good.

Once these notes have been worked on and the scope of the financial protection of the SCRA has been understood, soldiers may be eligible for debt relief, which in turn may result to reduced stress and may provide financial preparedness.

If you have more questions about military interest rate reduction under the SCRA, contact your unit judge advocate or seek professional assistance through our Contact page.