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What can I do about the high-interest loans I took out before I joined the military?

As a Marine myself, I understand that joining the military requires sacrifice, but I also know that there are amazing benefits to serving your country. Not only are you doing your part to protect democracy, but you get a steady paycheck, educational opportunities, advanced technical training, and a whole lot more. One perk your recruiter may not have told you aboutServicemembers Civil Relief Act is the Servicemembers Civil Relief Act (SCRA), which offers a bunch of financial protections when you are serving in the military.

One of the benefits SCRA provides is reducing the interest rate on any pre-service loans you or your spouse have to just 6 percent. Think about that. The credit card debt you’re carrying with a 23 percent interest rate? Slashed to 6 percent! Pretty awesome. But this won’t happen automatically. You’ll have to request it—and you may even need to demand it.

How to Get Your Interest Rates Reduced

First, take a look at all your loans and lines of credit. This includes car loans, student loans, mortgages, and credit cards. If any of them have an interest rate greater than 6 percent, you’ll have to do the following:

  • Notify your lender in writing of your eligibility for a reduced interest rate.
  • Include your copy of your orders to active duty service or a letter from your CO verifying the date you began active duty service.

Your lender is obligated to reduce your interest rate to 6 percent for the entire time you are on active duty, plus an additional year after the end of active duty. You also have these protections:

  • Your lender can’t add the amount over 6 percent back into your loan after you leave active duty.
  • Your lender can’t revoke your loan or credit account, change the terms of your credit, or refuse to grant you credit just because you exercised your SCRA rights.
  • Your lender can’t furnish negative information to a credit reporting company just for invoking your SCRA rights.

And if your lender does any of these things? Or refuses to lower your interest rate? That’s when you call me. Not only are there criminal penalties for SCRA violators, you can also sue the violator to get them to fix what they did wrong and to pay my fees if we win. I give free case evaluations and take these cases on contingency, so it doesn't cost you any money up front.

You deserve to be treated with the respect you have earned as a member of the United States military. Allow me to help you get that respect. Contact me online or call me directly at 415.802.0137 and I will do everything I can to help.

 

Michael F. Cardoza, Esq.
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U.S. Marine & Consumer Financial Protection Attorney dedicated to fighting debt and credit bureau harassment.