SCRA Interest Rate Cap: The 6% Rule, How It Works, How to File

If you read one page on this site, make it this one. The 6% cap is the single largest recurring dollar benefit in the SCRA. It covers almost every kind of debt, and invoking it takes one letter.

Here is the whole law in one sentence: any debt you had before you started active duty cannot charge you more than 6% per year while you serve, the excess is erased, and you can claim it with written notice and a copy of your orders. Below: the statute read line by line on August 15, 2026, then which loans, what it saves, which banks go lower, and how to file.

The rule, straight from § 3937

Which debts. Section 3937(a)(1) covers “an 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.” Joint debt with your spouse counts; debt in your spouse’s name alone does not. The section names no product type: cards, auto loans, mortgages, student loans, personal loans, and business loans you are personally liable on all fit “obligation or liability.”

How long. Subsection (a)(1) splits the world in two. Under (A), a “mortgage, trust deed, or other security in the nature of a mortgage” is capped “during the period of military service and one year thereafter.” Under (B), “any other obligation or liability” is capped “during the period of military service.” That is the mortgage tail, and Bank of America’s page states it in its own words: “for home loans, the benefit extends one year beyond your period of military service.”

Forgiven, not deferred. Subsection (a)(2): interest above 6% “is forgiven.” Subsection (a)(3): your periodic payment “shall be reduced by the amount of the interest forgiven.” A capped rate with an unchanged payment, or “deferred interest” waiting after separation, violates both paragraphs.

How you invoke it. Subsection (b)(1)(A): “not later than 180 days after the date of a servicemember’s termination or release from military service,” you give the creditor “written notice and a copy of” your orders (including extension orders) or “any other appropriate indicator of military service, including a certified letter from a commanding officer.” Subsection (b)(1)(B), added in 2018, lets a creditor use Defense Manpower Data Center information “in lieu of” your notice, with a safe harbor if DMDC shows you off active duty on the day it checks and your notice never arrives within the 180 days. Send the letter anyway.

Retroactive to the call. Subsection (b)(2): on receipt of your notice and orders, “the creditor shall treat the debt in accordance with subsection (a), effective as of the date on which the servicemember is called to military service.” The Justice Department’s page phrases it as “Interest rate benefits begin the day orders to active duty are issued.”

The creditor’s only out. Subsection (c): “A court may grant a creditor relief” if, “in the opinion of the court,” your ability to pay more than 6% “is not materially affected by reason of the servicemember’s military service.” The creditor has to petition a court and win, not decide it at a call center.

What counts as interest. Subsection (d)(1): “service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability.” An annual fee on a pre-service card is interest here, and so is a late fee; the late fees guide goes fee by fee, including which ones the MLA counts.

Penalty. Subsection (e): a knowing violation of subsection (a) is punishable by a fine under title 18, imprisonment for not more than one year, or both. Civil enforcement and your own right to sue live in §§ 4041 and 4042; see below.

Who counts as a servicemember is a § 3911 question answered in the eligibility guide: active duty in the six armed forces, PHS and NOAA officers on active service, Guard on Title 10 or a qualifying Title 32 § 502(f) national-emergency call, and Reservists from the day they receive orders.

What the 6% interest rate cap saves

The savings calculator runs one formula: balance times the percentage points above 6%, per year. Here it is on typical pre-service balances.

Those are simple-interest estimates on a fixed balance; a loan you are paying down saves somewhat less. Two things push the real number up. Retroactivity: two years of service before you write means two years of refund, sized in the refund calculator. And a lender that publishes 4% adds two more points: on the $22,000 auto loan above, an extra $440 a year.

Military interest rate cap by loan type

Cars. A pre-service auto loan caps at 6%, and if you paid a deposit or installment before service, § 3952 also blocks repossession without a court order. Capital One states 4% on auto loans it owns and services; no captive auto lender in our directory publishes a lower figure. See the auto loan guide and auto lender directory.

Credit cards. Balances on cards opened before service cap at 6%, fees included under § 3937(d). Cards opened at your first duty station are during-service credit. See the credit card guide.

Mortgages. The one debt with the statutory one-year tail (§ 3937(a)(1)(A)), paired with the § 3953 foreclosure shield for the same period. Watch who owns the loan: Bank of America and Capital One both state their voluntary 4% applies only to loans they own and service. See the mortgage guide and the servicer guide.

Student loans. Private and federal loans taken before service cap at 6%. For federal loans, GAO’s November 2016 report (GAO-17-4) describes how the Department of Education required servicers to check the DoD’s SCRA website and apply the cap without written notice. Sallie Mae states 5% on eligible private accounts. See student loans and the servicer guide.

Personal, installment, and business loans. All inside “obligation or liability.” Navy Federal’s page lists business loans among the accounts it caps. See the business loan guide and, for payday and title loans, that guide.

Which issuers publish a rate under 6% (as of August 15, 2026)

Six percent is the ceiling, not the market. Reading each issuer’s own page today:

The phantom-rate warning. Search “Chase SCRA” or “Citi SCRA” and you will find 4% and 0% repeated across military blogs. Chase’s page, read today, states no rate at all. Citi’s page, as this site last read it in July 2026 for the Citi guide, describes reduced rates and states no number. Barclays is credited with 0% everywhere and publishes “no more than 6%.” Those figures trace to blogs citing other blogs, and this site repeated them until July 2026, when we opened every issuer page and rebuilt the bank leaderboard around what issuers actually print; the rate tracker re-checks those pages monthly and logs every change with a date. Treat any sub-6% figure you cannot find on the issuer’s own domain as unverified, send the SCRA letter regardless, and get the applied rate in writing.

How to file the request

There is no form and no fee. Section 3937(b)(1) requires exactly two things: written notice and a copy of your orders (or a commander’s letter). The Justice Department’s page lists what the notice should contain: your name, address, email, and phone; your active-duty status and station; the statement that you are requesting the 6% cap under the SCRA; every account number; and a copy of your orders. Notice can be electronic through the lender’s portal, and even if you enroll through a lender’s military-benefits page, DOJ says to send written notice and orders anyway “to ensure you receive the interest rate cap for the entire period of eligibility.”

Invoke the 6% cap

1. List every account opened before your active-duty start date with an APR above 6%. Include joint accounts with your spouse.
2. Draft one notice per lender. The letter generator writes it, or copy the request letter template. Cite § 3937, name every account, and demand application back to the date you were called to service.
3. Attach a copy of your orders. If you extend or re-up, send the new orders too. If a lender questions your status, add a DMDC certificate.
4. Send by certified mail with return receipt, or through the lender’s documented SCRA channel (the department directory lists each one). Keep copies of everything.
5. Confirm three things on the next statement: rate at or below 6%, payment reduced, and a retroactive adjustment back to your call-up date.
6. If any of the three is missing, escalate in writing citing the statute, then your installation legal assistance office, then a CFPB complaint. The escalation guide maps it.

The how-to-apply guide covers the same steps for every SCRA benefit.

Refunds

Because § 3937(b)(2) makes the cap effective as of the date you were called to service, a late letter is not a lost benefit. Every month a pre-service lender charged you above 6% between your call-up date and the day it applied the cap is money it owes back, as a recomputed balance, a credit, or a check. The refund guide shows how to demand it and the refund calculator sizes it.

When the cap does not apply

Credit you took on during service. Section 3937 covers pre-service debt only. During-service consumer credit falls under the Military Lending Act, 10 U.S.C. § 987, which caps the annual percentage rate at 36% and, unlike the SCRA, applies automatically. MLA vs. SCRA sorts a specific loan into the right law.

A refinance or consolidation during service. The Justice Department’s page says it plainly: “If you refinance or consolidate while on active duty, you may in effect have a new loan, one that originates during service, not before it.” A balance transfer to a new card during service does the same thing. The refinance timing guide explains why the same transaction before your start date preserves the cap and after it forfeits it.

A court finds you can afford more. The § 3937(c) petition above. Rare, and it takes a court, not a lender’s say-so.

Investor-owned loans, for the voluntary rates. The statutory 6% follows the loan. The voluntary 4% at Capital One and Bank of America, by their own pages, does not: a loan owned by Fannie Mae, Freddie Mac, or another investor gets 6%. Re-check the rate after any servicing transfer.

Enforcement: what happens when lenders skip this

Refusals are rarer than they used to be, because refusing got expensive. In July 2012 Capital One agreed to pay approximately $12 million to resolve Justice Department allegations that included “improper denials of the 6 percent interest rate the SCRA guarantees to service members on some credit card and car loans and insufficient 6 percent benefits granted.” The consent order set a term every servicemember should know: Capital One “agreed to treat a service member’s request for a 6 percent rate relief in one area of its lending, such as credit cards, as a request for a 6 percent rate relief for any loan the servicemember may have with Capital One or its affiliates,” the first enterprise-wide rate relief DOJ had obtained. Full record on the Capital One case page.

In May 2014 the Justice Department announced its first SCRA lawsuit against student loan owners and servicers: Sallie Mae agreed to pay $60 million for a nationwide pattern, dating back to 2005, of failing to give servicemembers the 6% cap, with about 60,000 servicemembers expected to receive compensation (case page). Our enforcement ledger tracks the rate-cap docket since then, including two private class actions in which the United States filed statements of interest against Citibank and American Express.

Your own escalation path: written demand citing § 3937, then the installation legal assistance office (free), then a CFPB complaint, then the DOJ Servicemembers and Veterans Initiative. Section 4042 gives you a private right of action with attorney fees if you win. Most disputes die at step one.

What this is NOT

The cap is not debt forgiveness. You still owe the principal and 6% interest, and you still make the reduced payment on time; a payment you actually miss can be reported (§ 3919 protects the request, not a real delinquency, and the CFPB says so on its SCRA page). It does not touch credit you opened after your start date, it does not survive a during-service refinance, and it does not force any lender below 6%: the 4% and 5% figures above are voluntary and can change without notice. Where a lender’s page states no number, assume 6% and get the applied rate in writing. If you are unsure whether you or the debt qualifies, the eligibility guide and eligibility checker come first; the letter comes second.

The law behind this: 50 U.S.C. § 3937

Maximum rate of interest on debts incurred before military service: read the statute , or see where it sits in the whole Act .