Does the SCRA automatically lower my interest rate to 6%?

No. You must send a written request and a copy of your orders. Until the creditor receives that notice, the contract rate can keep running.

Which debts get the 6% cap?

Debts you incurred before military service. That can include a pre-service mortgage, car loan, credit card, or student loan. Debt you open while you are already serving is generally outside this cap.

Is the extra interest postponed or wiped out?

Forgiven. The creditor must forgive interest above 6% during the protected period. It is not a deferral they can collect later.

How long does the mortgage protection last?

For a mortgage, the 6% cap applies during military service and for one year after service ends. Most other pre-service debts are capped during military service.

Is this the same as the Military Lending Act?

No. The Military Lending Act limits certain consumer credit taken out while you are serving (a 36% military annual percentage rate, including fees). The SCRA 6% rule is about pre-service debt. They solve different problems.

The SCRA 6% Interest Cap: Which Debts Qualify and How to Ask

An all-female C-17 aircrew walking the cargo ramp in flight suits.

The Servicemembers Civil Relief Act can cap interest at 6% on debt you took on before active duty. It is not automatic, it does not cover new debt you open while serving, and the creditor must forgive the excess interest, not just postpone it.

Key Takeaways

SCRA’s 6% cap applies to interest on obligations incurred before military service, not to loans you open after you are already serving.
You must ask in writing and include a copy of your orders. The cap is not automatic.
Interest above 6% during the protected period is forgiven. The creditor does not get to add it back later as a balloon.
For mortgages, the 6% protection can continue for one year after military service ends. Other debts are generally protected during service.
A creditor may ask a court to deny the reduction if military service did not materially affect your ability to pay. That is their burden, not yours to disprove in the first letter.

The Short Version

The Servicemembers Civil Relief Act can cap interest at 6% on debt you took on before you entered military service. You have to ask, in writing, with orders. Interest above 6% during the protected period is forgiven, not parked for later.

This is not the rule for breaking a lease. Lease termination is a different SCRA right, covered in how to break a lease with PCS orders.

What qualifies

Before service: the obligation existed before the current period of active duty.
During service: new credit cards, new car loans, and most new mortgages you open while already serving do not get this 6% cap.
Mortgages: the cap runs through military service and for one year after it ends.
Other pre-service debt: generally during military service.
Joint accounts: the protection follows the servicemember’s obligation. Name the servicemember on the request.

A creditor can ask a court to deny the cut if they prove military service did not materially affect your ability to pay. You do not have to prove hardship in the first letter. You have to give notice.

How to send the request

Pull the account number, the date you opened it, and the date active duty started.
Write a short letter: you are requesting the SCRA interest limitation, the debt was incurred before service, and you have attached orders.
Send it in a way you can prove. Keep the letter, the orders copy, and the delivery receipt with your LES folder.
Check the next statement. The rate should drop, the excess interest should come off, and the payment should be recalculated. If it does not, follow up in writing before you assume a phone rep fixed it.

Department of Justice servicemember resources: justice.gov/servicemembers. This page is not legal advice. If a creditor refuses a mortgage you opened before service, talk to a military legal assistance office.

What people mix up

SCRA 6% cap versus nearby rules
Rule	What it does
SCRA 6% cap	Lowers interest on pre-service debt after you give written notice and orders.
SCRA lease termination	Ends a lease early when you have qualifying orders. Different letter, different timeline.
Military Lending Act	Caps certain credit you take while serving, using a 36% rate that includes fees. It does not replace the 6% pre-service rule.

If the debt is a house you still own at the next duty station, pair this with what to do when orders drop and you own and the VA loan guide. The 6% cap does not create VA entitlement.

Frequently Asked Questions

Does the SCRA automatically lower my interest rate to 6%?: No. You must send a written request and a copy of your orders. Until the creditor receives that notice, the contract rate can keep running.
Which debts get the 6% cap?: Debts you incurred before military service. That can include a pre-service mortgage, car loan, credit card, or student loan. Debt you open while you are already serving is generally outside this cap.
Is the extra interest postponed or wiped out?: Forgiven. The creditor must forgive interest above 6% during the protected period. It is not a deferral they can collect later.
How long does the mortgage protection last?: For a mortgage, the 6% cap applies during military service and for one year after service ends. Most other pre-service debts are capped during military service.
Is this the same as the Military Lending Act?: No. The Military Lending Act limits certain consumer credit taken out while you are serving (a 36% military annual percentage rate, including fees). The SCRA 6% rule is about pre-service debt. They solve different problems.

Ready to put this into action?

Connect with a verified military real estate agent at your gaining installation, or start planning your PCS with our free Mission Planner tool.

Find My Agent →PCS Planner

Airmen, including a woman in a flight suit, push cargo aboard a C-17 during a military move.

PCS Moving