Military Members Get Special Interest Rate Limits Under Federal Law

Interest rate

One of the best things about the Servicemember's Civil Relief Act (SCRA) is the interest rate limit provision.

The federal law mandates that any debt you have before joining the military, either credit card, auto loan, or mortgage will have the interest rate limited to 6% while you are on active duty.

Some credit card companies even waive their annual fees for their top-of-the-line reward and travel cards for active duty military members.

You must have made the purchase or incurred the debt before you joined the military, and the interest rate is limited to 6% while you are on active duty for most debt. Mortgages will have their interest rate limited to 6% for the active duty period plus one year after discharge.

Your monthly payment must also be reduced to reflect the 6% interest rate cap.

Active duty service members and veterans who served in areas that qualify them for imminent danger or hostile fire pay are exempt from any interest charges on certain federal student loans that originated after Sep. 30, 2008.

Contact your local legal office for more information.

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