SCRA Interest Rate Limits

One of the most significant provisions under the Servicemember's Civil Relief Act (SCRA) limits the amount of interest that may be collected on debts of persons in military service to 6 percent per year during the period of military service.

The expanded SCRA further states that no interest above 6 percent can accrue for credit obligations while on active duty, nor can that excess interest become due once the servicemember leaves active duty A? instead that portion above 6 percent is permanently forgiven. Furthermore, the monthly payment must be reduced by the amount of interest saved during the covered period.