Sample letter to Creditors/Mortgage Lenders for interest rate reduction under the SCRA

[DragonFlyer]

Download in PDF format found by clicking here.

 

Sample Letter to Creditors/Mortgage Lenders to

Request a Reduction in Interest Rates under the SCRA

Note: The following is a sample only. It is not legal advice of any kind. Any request for a

reduction in interest rates should be sent to the creditor via CERTIFIED MAIL, RETURN

RECEIPT REQUESTED to comply with the SCRA and provide the sender with proof it was

received.

 

[service member’s Return Address]

[Date]

[CREDITOR ADDRESS]

 

 

Dear [sir or Madam]:

 

I am currently obligated to your company for a loan in the amount of approximately [$],

at an interest rate of [%]. This obligation was entered into on [DATE]. At that time I was not on

active duty in the armed services.

 

I have now entered [or been notified that I will enter] active military service in the U.S.

[bRANCH OF SERVICE] on [DATE]. A copy of my orders is enclosed. My entry into active

military service materially affects my ability to meet my repayment obligation.

 

The Service Member’s Civil Relief Act (50 U.S.C. App. §§ 501-596) limits the amount

of interest military service members entering active duty may be charged on any existing debt to

6% or less of annual interest. The law requires that this interest rate apply to the outstanding

balance of the obligation, beginning the date of entry into active military service, and that the

rate is maintained for the duration of active service. This interest includes service charges,

renewal charges, fees, or any other charges.

 

Under 50 U.S.C. App. § 527(a)(2) any excess interest above 6% must be forgiven, not

accrued. The periodic repayment amount must be recalculated to reflect this reduction. Please

ensure that your records in this matter reflect the rate reduction required by law and that any

excess charges incurred during the period of my active service are withdrawn.

 

Please note that Service Member’s Civil Relief Act also limits the manner in which you

may enforce this obligation, including limiting rights to repossession or foreclosure.

 

Thank you for your attention in this matter. I can be reached at the address above with

any questions you may have.

 

 

Sincerely,

[service member's name, rank and branch of service]

Edited August 27, 2009 by DragonFlyer

[Lynn37]

Does anyone know if any creditors that Have lowered lower than 6%?

[DragonFlyer]

I have heard of it happening, typically through companies like USAA who specialize in military lending and products. If I were you, I'd throw in a goodwill request in the letter stating you'd like their kind consideration to apply a rate lower than the 6% cap. As you can see, the wording already says "6% or less" per the SCRA. Use that to your advantage!

[lupoman]

I have heard of it happening, typically through companies like USAA who specialize in military lending and products. If I were you, I'd throw in a goodwill request in the letter stating you'd like their kind consideration to apply a rate lower than the 6% cap. As you can see, the wording already says "6% or less" per the SCRA. Use that to your advantage!

 

I Chase lowered mine to 0%!!! I was really surprised!! best buy, AMEX (who even back dated/credited) I havent heard of many that will not.