SCRA: The 6% Interest Cap and Money Protections You're Probably Not Using
The Servicemembers Civil Relief Act (SCRA) is one of the most underused financial benefits in the military. Its headline perk: a 6% interest-rate cap on debts you took on before entering active duty — and that's just the start.
The 6% interest cap
- Caps interest at 6% APR on pre-service debts (credit cards, car loans, some student loans) for the duration of active duty.
- Interest above 6% is permanently forgiven, not deferred — the lender must reduce it.
- You request it in writing with a copy of your orders; the cap applies retroactively to your active-duty start date.
The other protections
- Lease termination: break a housing or auto lease penalty-free on PCS or deployment orders of 90+ days.
- Foreclosure & repossession protection: lenders generally need a court order to foreclose or repossess during service.
- Default-judgment protection and the ability to stay (pause) civil proceedings.
- Tax residency: the SCRA (with MSRRA) lets you keep your home-state residency — see the tax filing guide.
Don't confuse it with the MLA
The Military Lending Act (MLA) is different: it caps new consumer loans taken while serving at a 36% Military APR. SCRA covers pre-service debt at 6%; MLA covers new debt at 36%. Use both.
Free, expert help is available at your installation's legal assistance office — they'll send the SCRA letters for you at no cost.
Free up cash flow — then put the savings toward your TSP or Roth.
Calculate my pay →Frequently asked questions
What is the SCRA 6% interest cap?
The Servicemembers Civil Relief Act caps interest at 6% APR on debts taken on before active duty; interest above 6% is permanently forgiven, not deferred. You request it in writing with your orders.
Can I break a lease under the SCRA?
Yes — you can terminate a housing or auto lease without penalty on PCS or deployment orders of 90 or more days.
What's the difference between SCRA and the MLA?
SCRA caps pre-service debt at 6%; the Military Lending Act caps new consumer loans taken while serving at a 36% Military APR.