|
Money and Mobility
What Happens to My Mortgage Payment, Car Loan, and Credit Card Bills?
If you (and, in some cases, your dependents) will
have difficulty making these payments because of your military
service, the Service Members’ Civil
Relief Act (SCRA) will help. For starters, you can have interest
on these loans capped at 6 percent for the time you are in
the military. (This cap applies only to loans you had before
your military service.) Lenders also must lower your monthly
loan payments as a result of the 6 percent interest rate cap.
Sample Letter Requesting A Reduced Interest Rate
(Send
Certified Mail with Return Receipt)
Date
Your Name
Your Address
City, State ZIP
Creditor Name
Creditor Address
City, State ZIP
Re: Loan #
Dear Sir or Madam:
I am writing to inform you that I have
entered active military service. I currently have an
outstanding loan with your company and request that you
apply account benefits provided by the Servicemembers’ Civil
Relief Act (SCRA).
Under
this law, there is a cap of 6 percent annually on any
interest charges, including, but not limited to, service
charges, annual charges, and fees. This applies when
a servicemember’s obligation
was incurred prior to entry into active duty and his
or her current financial situation does not allow full
repayment. Due to my military service, I have experienced
a significant reduction in income.
Please let me hear
from you about this matter as soon as possible. You can
reach me at the address I’ve listed above, by phone
at [fill in your number], or by e-mail at [fill in your
e-mail address]. I have included a copy of my military
orders.
Thank
you for your assistance.
Sincerely,
Your signature |
To have your interest rate reduced to 6 percent, you must
let creditors know—in writing—about your orders
and your intent to invoke the 6 percent cap. This notice must
be sent no later than 180 days after you leave military service.
If you do make special arrangements with creditors, get the
details in writing. Also, consider ordering a copy of your
credit report before you leave and after you return. Make sure
negative information is not mistakenly included. For more information, see the section “Check
Your Credit Report”.
If you don’t believe you can pay your mortgage
or other loans even with a lower interest rate, talk with your
unit’s legal assistance office. They can help you explore
other options.
What About My Student Loans?
The 6 percent cap on loans provided by the Servicemembers’
Civil Relief Act does not apply to student loans, but other
help may be available. In the past, the Department of Education
has postponed student loan payments for Reservists called to
active duty. Talk with your school or loan administrator or
visit the Web site for the National Association of Student
Financial Aid Administrators (NASFAA).
|
 |
