I've heard there is something in the Servicemembers Civil Relief Act that deals with interest rates on loans and stuff like that. What does the law say?
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Section 527 of the Servicemembers Civil Relief Act (SCRA for short) takes some worry out of borrowing at high interest rates for servicemembers. The SCRA gives servicemembers a break on interest rates on loans or similar obligations that they entered before the start of military service. The SCRA allows you to reduce interest rates higher than 6% (like a loan charging you 8.9%) to a maximum of 6%. Your lender will then lower the rate and lower the payments while you are on military service. The catch though is that the loan has to be outstanding before you entered service (that is, you had it before you entered service). If you pick up a loan after you enter service and that loan has a rate higher than 6%, say, 10%, you still have to pay the higher rate; you cannot have it reduced to 6%.
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Section 527 of the Servicemembers Civil Relief Act (SCRA for short) takes some worry out of borrowing at high interest rates for servicemembers. The SCRA gives servicemembers a break on interest rates on loans or similar obligations that they entered before the start of military service. The SCRA allows you to reduce interest rates higher than 6% (like a loan charging you 8.9%) to a maximum of 6%. Your lender will then lower the rate and lower the payments while you are on military service. The catch though is that the loan has to be outstanding before you entered service (that is, you had it before you entered service). If you pick up a loan after you enter service and that loan has a rate higher than 6%, say, 10%, you still have to pay the higher rate; you cannot have it reduced to 6%.
