The SCRA 6% Interest Rate Cap
Your most valuable SCRA benefit: any debt incurred before military service is capped at 6% interest. Learn exactly how it works and how much you could save.
How the 6% Cap Works
Under the Servicemembers Civil Relief Act, creditors must reduce the interest rate to 6% per year on any debt you incurred before entering military service. This isn't a deferment—the excess interest is completely forgiven.
For example, if you have a credit card charging 24% APR, your lender must reduce it to 6% for the duration of your active duty service. The 18% difference isn't added to your balance later—it simply disappears.
The rate cap applies from the first day of your military service, even if you don't request it until later. This means you may be entitled to retroactive refunds of excess interest you've already paid.
Which Debts Qualify?
The 6% cap applies to virtually all consumer debts, as long as they were incurred before your military service began. This includes:
What Doesn't Qualify
Debts incurred after your military service began do not qualify for the 6% cap. However, they may be covered by the Military Lending Act (MLA), which has a 36% cap on certain consumer loans. Learn about MLA vs SCRA →
Calculating Your Savings
The savings can be substantial, especially on high-interest debt. Here's a real-world example:
Credit Card: $10,000 Balance at 22% APR
Without SCRA, paying $300/month for 4 years of service:
The savings compound across multiple accounts. A typical service member with 3-4 pre-service debts can save $3,000 to $15,000+ over their service period.
How to Request the Rate Reduction
Lenders are required by law to grant the rate reduction, but they won't do it automatically. You need to formally request it:
- Get your military orders — You'll need orders showing your active duty start date. If you don't have physical copies, use the DMDC SCRA website to generate verification.
- Identify all qualifying debts — List every account opened before your service date with an interest rate above 6%.
- Submit a written request — Send a letter to each creditor requesting SCRA benefits. Include a copy of your military orders.
- Follow up — Creditors have 30 days to respond. If your rate isn't reduced, follow up and escalate if necessary.
What Lenders Are Required to Do
Once they receive your valid request, lenders must:
- Reduce your interest rate to 6% retroactive to your service start date
- Recalculate all payments made during your service
- Refund any excess interest already paid
- Apply the lower rate going forward for the duration of your service
How Long Does It Last?
The 6% rate cap remains in effect for the entire period of your military service. For most debts, protections extend for an additional period after you leave service:
- Mortgages: Protection continues for 1 year after military service ends
- Other debts: Protection generally ends when your military service ends
Common Issues & Solutions
Lender claims they need more documentation
By law, a copy of your military orders is sufficient. If a lender asks for additional documents, politely remind them that the SCRA only requires orders as proof of service.
Rate reduction applied but no refund issued
Follow up specifically about retroactive refunds. Some lenders reduce rates going forward but "forget" about the interest you've already overpaid.
Lender refuses to comply
Contact the Consumer Financial Protection Bureau (CFPB) or your base legal assistance office. SCRA violations can result in significant penalties for lenders.
Ready to Claim Your 6% Rate?
SCRA Saver automates the entire process—we identify your qualifying debts, calculate your savings, and submit claims to each lender on your behalf.
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