Servicemembers' Civil Relief Act and interest rates

  • Published
  • By Capt. Justin T. Rossi
  • 92nd Air Refueling Wing Judge Advocate
Are your interest rates too high? If you are paying more than six percent, then the answer is probably "yes."

If you are paying more than six percent interest on debts incurred before entry on active duty, you may qualify to have your interest rate reduced to six percent. This includes most financial obligations, such as credit cards, private loans, student loans and mortgages. This does not include debts incurred after entry to active duty. To qualify, two conditions must be met:

     1. The debt or obligation must have been incurred prior to the service member coming on active duty; and  
     2. The service member's ability to pay such debt or obligation has been materially affected by reason of military service (i.e., reduced income as a result of entering active duty).

If you meet both conditions, you qualify for the protection of the Servicemembers' Civil Relief Act. This SCRA protection requires the creditor to reduce your interest rate to six percent for the period of your military service, unless the creditor can prove in court that your ability to pay the higher interest rate is not "materially affected" by your military service. This protection begins on the date of entering active duty service and generally ends upon termination of service. For mortgage obligations, the protection extends to one year following termination of service. The interest over six percent must be forgiven, not just deferred. This also means monthly payments must be reduced by the reduction in the interest rate.

To obtain an interest rate reduction under SCRA, contact your loan servicer. You will need to send a written request to your servicer, and will also need to provide your servicer with a copy of your orders calling you on to active duty. You can submit your request anytime during your active duty service and up to 180 days after leaving service.

If you are confident that you qualify for the SCRA interest rate protection, please see the Air Force Legal Assistance website at for a sample interest rate request letter for creditors. The AFLA website also includes further information regarding interest rates.

If you are unsure of whether you qualify for the SCRA interest rate protection, visit your local legal office to speak with an attorney. Moreover, please consult your local legal office if your servicer refuses to honor or fails to respond to your written request.

For more information regarding interest rates or other legal issues, such as family law, wills, landlord-tenant issues and powers of attorney, visit the legal office, located in the wing headquarters, Suite 121.

Hours of operation and services provided:

     Wills for Active Duty members and Dependents - Wednesdays (by appointment only)

     POAs and Notaries - Monday to Friday from 8:30 a.m. to 4:30 p.m.

     Legal Assistance - Tuesdays and Thursdays from 8:30 a.m. to 9:30 a.m. (Walk-ins)

The material in this article represents general legal principles. The law is continually changing; although the information in this article was current as of the date it was drafted, some provisions may have changed. It is always best to consult an attorney about your legal rights and responsibilities regarding your particular case.