The SCRA 6% Interest Rate Cap

How the 6% Cap Works

Under the Servicemembers Civil Relief Act (50 U.S.C. § 3937), 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.

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:

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:

1. Get your military orders — You'll need orders showing your active duty start date. If you don't have physical copies, use the official DMDC SCRA website to generate verification.
2. Identify all qualifying debts — List every account opened before your service date with an interest rate above 6%.
3. Submit a written request — Send a letter to each creditor requesting SCRA benefits. Include a copy of your military orders.
4. 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 comply. See our guides for specific lenders: Chase, Bank of America, Capital One, USAA, Navy Federal, or browse all lender guides.

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—the Department of Justice has recovered over $481 million for servicemembers through SCRA enforcement.

Official Government Resources

Learn more about the 6% interest rate cap from these authoritative sources:

• DOJ 6% Rate Cap Fact Sheet — Official Department of Justice guidance
• CFPB Interest Rate Limits FAQ — Consumer Financial Protection Bureau explanation
• 50 U.S.C. § 3937 — The actual law text at Cornell Law
• Military OneSource SCRA Guide — Official DoD resource