You've Been Overcharged. Here's How to Fix It.

If you've been on active duty and paying more than 6% interest on any pre-service debt, you've been paying money you don't owe. Under the SCRA, lenders are required to retroactively apply the 6% rate cap and refund any excess interest you've paid.

This isn't a request or a favor—it's the law. And here's exactly how to get your money back.

Step 1: Gather Your Documentation

Before contacting any lender, collect these documents:

Proof of military service:

  • Active duty orders (DA Form 4187 for Army, equivalent for other branches)
  • Letter from your commanding officer on unit letterhead
  • Leave and Earnings Statement (LES) showing active duty status

Account information:

  • Account numbers for all applicable debts
  • Recent statements showing current interest rates
  • Proof that the debt was incurred before your active duty start date

The key document is your orders or proof of active duty status. Lenders verify this against the DMDC (Defense Manpower Data Center) database, so accuracy matters.

Step 2: Identify All Qualifying Debts

Make a comprehensive list. Qualifying debts include:

  • Mortgages and home equity loans
  • Auto loans and vehicle financing
  • Credit cards (all cards opened before service)
  • Student loans (federal and private)
  • Personal loans
  • Retail financing and store cards
  • Medical debt payment plans

The critical test: Was the debt incurred before your active duty start date? If yes, it qualifies.

Step 3: Calculate Your Potential Refund

For each debt, calculate the excess interest paid:

Formula: (Current APR - 6%) × Average Balance × Months Since Active Duty Start ÷ 12

Example:

  • Credit card: $5,000 average balance at 18% APR
  • Active duty for 18 months
  • Excess rate: 18% - 6% = 12%
  • Refund: 12% × $5,000 × 18 ÷ 12 = $900

This is just one card. Service members with multiple debts often recover thousands of dollars.

Step 4: Contact Each Lender

Most major lenders have dedicated military benefits departments. Here's how to reach them effectively:

By phone: Ask specifically for the "military benefits department" or "SCRA department." General customer service often doesn't know how to process these requests.

By mail: Send a formal written request including:

  • Your name, account number, and contact information
  • A copy of your military orders
  • A clear statement requesting SCRA rate reduction to 6%
  • A request for retroactive application and refund of excess interest
  • The date you entered active duty

Sample language: "Pursuant to the Servicemembers Civil Relief Act (50 U.S.C. § 3937), I am requesting that the interest rate on the above-referenced account be reduced to 6% per annum, effective as of my active duty start date of [DATE]. I am also requesting a refund of all interest charged in excess of 6% since that date."

Step 5: Follow Up and Document Everything

Lenders have 30 days to process your request under the SCRA. If you don't receive confirmation:

  • Call and ask for a status update
  • Request a supervisor if needed
  • Document the date, time, and name of everyone you speak with
  • Send follow-up letters via certified mail

Most lenders comply promptly, but persistence is sometimes necessary.

Step 6: Verify the Refund

When you receive your refund, verify the calculation:

  • Check that the new rate is exactly 6%
  • Confirm the retroactive date matches your active duty start
  • Calculate whether the refund amount is correct
  • Review your next statement to ensure the new rate is applied going forward

Errors happen. Don't assume the lender got it right—verify.

What If a Lender Refuses?

Lender non-compliance with SCRA is a federal violation. If a lender refuses to honor your rights:

  1. Document the refusal in writing
  2. File a complaint with the Consumer Financial Protection Bureau (CFPB)
  3. Contact your installation's legal assistance office
  4. Consider consulting with an attorney specializing in military law

The SCRA has teeth. Lenders face significant penalties for violations, including liability for actual damages, statutory damages, and attorney's fees.

Don't Leave Money on the Table

The refund you're owed is real money—money you earned, money that's legally yours. The process takes effort, but the payoff is significant. Service members who follow these steps typically recover $1,000 to $5,000 or more in excess interest.

Start today. Your refund is waiting.