When you serve on active duty, it can be challenging to manage credit payments, especially if you have loans with high interest rates. Fortunately, the Servicemembers Civil Relief Act (SCRA) offers a solution by allowing you to reduce the interest rate on pre-existing loans while you are serving. This federal law sets a maximum interest rate of 6%, including service charges, renewal charges, and fees.

The SCRA applies when your active duty significantly affects your ability to pay, such as a decrease in income due to military service. To benefit from this law, a sample letter called the "Letter to Request 6% Interest Rate Cap on Loans" is provided. This letter template will help you communicate effectively to lenders that you are seeking the application of the 6% interest rate cap.

By taking advantage of the SCRA and utilizing the sample letter, you can alleviate the financial burden of high interest rates and potentially save a substantial amount of money during your active duty period. It's important to customize the letter according to your individual circumstances and seek guidance from legal or financial advisors.

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Last Reviewed: May 19, 2023