Are you eligible for an interest rate reduction?
Servicemembers paying interest rates in excess of 6 percent per year may be entitled to relief under federal law. Section 527 of the Servicemember's Civil Relief Act (SCRA) provides that "[a]n obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember's spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent per year during the period of military service." This means that if you incurred a debt in the form of a mortgage, car loan, credit card balance, or just about any other financial liability, prior to entering military service, you may be entitled to reduce your interest payments to 6 percent during the entire period of active duty service. Please note, however, that the reduction does not apply to federally guaranteed student loans.
