SCRA: Interest Rate Limits

[Azdevil78]

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."



I found this on military.com. Has anyone ever heard or done this? Or knows what it is limited too? I have student loans above 8% and this would be pretty cool if I could lower them.

 

[boobcheese]

From my understanding, this only applies to those debts incurred prior to joining the military but yes you can definitely have interest rates reduced. I had a Sears card from before I joined that had a rediculous interest rate. I got a form from my admin office, don't recall exactly which one, filled it out and sent it in with a copy of my LES. Not only did they reduce my rate to the mandatory 6% but actually set it to 0% and refunded all of the interest I'd ever paid to them! Even purchases I make now are at 0% interest. Very good deal!

Just found this:

Section 526 of the Servicemembers’ Civil Relief Act (SCRA) limits the highest interest rate allowed on some pre-active duty service loans when the military member is “…materially affected” because of military service.

You may be entitled to have the interest rate on some of your loans reduced to 6% while you are on active duty if –
*You took out the loan (other than a government-insured, student loan) during a time when you were not on any form of active duty in any branch of the uniformed services, and
*Your interest rate is currently above 6% per year, and
*Your military service materially affects your ability to pay the loan at the pre-military service interest rate. Generally, this means that you make less money on active duty (including your non-taxable housing allowance and other entitlements) than you made as a civilian.