What Is the Servicemembers Civil Relief Act (SCRA)?
The Servicemembers Civil Relief Act (SCRA) is a federal law that provides a wide range of financial and legal protections to active duty military members, National Guard members called to active duty, and reservists on active duty. Its purpose is to ease the financial burden of military service so that service members can focus on their duties without worrying about financial hardship at home.
Key Financial Protections Under the SCRA
1. The 6% Interest Rate Cap
One of the most valuable SCRA benefits is the 6% annual interest rate cap. If you took out a loan, credit card, or mortgage before going on active duty, your lender is required to reduce the interest rate to no more than 6% per year for the duration of your active service. This applies to:
- Credit card balances
- Auto loans
- Student loans (private; federal loans have separate protections)
- Mortgages taken out before service
- Personal loans
To claim this benefit, you must send your lender written notice and a copy of your military orders within 180 days of completing active duty.
2. Foreclosure Protections
Under the SCRA, lenders cannot foreclose on your home without a court order while you are on active duty and for up to one year after. This applies to mortgages that originated before your active duty period began.
3. Eviction Protections
If your monthly rent is at or below a specified threshold (adjusted periodically for inflation), your landlord cannot evict you without a court order while you are on active duty. Courts can also delay eviction proceedings if military duty materially affects your ability to pay.
4. Lease Termination Rights
Service members can terminate a residential lease early without penalty if they receive deployment orders for more than 90 days or a permanent change of station (PCS). Simply provide written notice and a copy of your military orders to your landlord.
5. Protections Against Default Judgments
If you are sued while on active duty and cannot appear in court, the SCRA allows a court to delay (stay) the proceedings. Courts must also appoint an attorney to represent you if a default judgment is entered against you.
How to Claim Your SCRA Benefits
- Identify which debts qualify — only debts incurred before active duty are covered by the interest rate cap.
- Notify your lender in writing — a simple letter along with your military orders is sufficient.
- Check your credit reports — ensure that lenders are correctly applying the rate reduction.
- Contact your JAG office if a lender refuses to comply — violations can result in civil and criminal penalties for the lender.
SCRA vs. MLA: What's the Difference?
The Military Lending Act (MLA) is a separate law that caps interest rates at 36% MAPR on new loans made to active duty service members and their dependents. While the SCRA covers pre-service debts, the MLA applies to new credit products taken out during active duty. Together, these two laws provide comprehensive protection across your financial life.
Resources and Where to Get Help
- Your installation's Judge Advocate General (JAG) office offers free legal advice.
- The Consumer Financial Protection Bureau (CFPB) has an Office of Servicemember Affairs.
- The Department of Justice enforces SCRA violations — you can file a complaint at justice.gov.