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6% Interest Rate Cap

If your military duty affects your ability to make your credit card, mortgage, or other loan payments, under the SCRA you may have your interest rate capped at 6% for the duration of your military service. This only addresses debts that you incurred individually, or jointly with your spouse, before coming on active duty. 

Although this provisions only applies if the military duty affects your ability to pay your debts, the burden is on the creditor (the entity or person you owe money to) to obtain a court order if the creditor believes that your military duty does not materially affect your ability to make payments.

To qualify for the rate cap, you must provide written notice and a copy of your orders to your creditor within 180 days of your release from military service. Upon receipt of the notice, your creditor must reduce the interest rate to a maximum of 6% effective the first day of your active duty. Your monthly payments must be reduced by the amount saved in interest during the covered period and the amount of interest over 6% is deemed forgiven and cannot later be recovered by the creditor.  50 USC App 3937.