Question: What's the deal with the Servicemember's Civil Relief Act?
Answer: The Servicemember's Civil Relief Act (formerlly the Soldiers and Sailors Civil Relief Act) requires creditors to reduce the interest rates on loans made before an individual went onto active duty, to six percent, during the entire time the member is on active duty. The member must show that military service has affected his/her ability to pay.
I should clarify that the six-percent interest cap really has nothing to do with deployment status, and everything to do with going on active duty. Loans received BEFORE active duty are reduced to six percent interest during the time the servicemember is on active duty. Loans received after a member goes on active duty are not so protected, even if the member deploys.
The Servicemember's Civil Relief Act (SCRA) provides many civil protections for members of the military. For more information, see the articles, Servicemember's Civil Relief Act, Simplified, and Servicemember's Civil Relief Act, in Detail.
