SCRA Interest Rate Limits

Interest rate

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% per year during the period of military service.

The SCRA unambiguously states that no interest above 6% can accrue for credit obligations (that were established prior to active duty or activation) while on active duty, nor can that excess interest become due once the servicemember leaves active duty - 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.

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