50 USC 3937 - Maximum rate of interest on debts incurred before military service

U.S Code last checked for updates: Apr 12, 2026

§ 3937.

Maximum rate of interest on debts incurred before military service

(a)

Interest rate limitation

(1)

Limitation to 6 percent

An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember’s spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent—

(A)

during the period of military service and one year thereafter, in the case of an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage; or

(B)

during the period of military service, in the case of any other obligation or liability.

(2)

Forgiveness of interest in excess of 6 percent

(3)

Prevention of acceleration of principal

(b)

Implementation of limitation

(1)

Proof of military service

(A)

In general

Not later than 180 days after the date of a servicemember’s termination or release from military service, in order for an obligation or liability of the servicemember to be subject to the interest rate limitation in subsection (a), the servicemember shall provide to the creditor written notice and a copy of—

(i)

the military orders calling the servicemember to military service and any orders further extending military service; or

(ii)

any other appropriate indicator of military service, including a certified letter from a commanding officer.

(B)

Independent verification by creditor

(i)

In general

(ii)

Safe harbor

A creditor that uses the information retrieved from the Defense Manpower Data Center under clause (i) with respect to a servicemember has not failed to treat the debt of the servicemember in accordance with subsection (a) if—

(I)

such information indicates that, on the date the creditor retrieves such information, the servicemember is not on active duty; and

(II)

the creditor has not, by the end of the 180-day period under subparagraph (A), received the written notice and documentation required under that subparagraph with respect to the servicemember.

(2)

Limitation effective as of date of order to active duty

(c)

Creditor protection

(d)

Definitions

In this section:

(1)

Interest

(2)

Obligation or liability

(e)

Penalty

(Oct. 17, 1940, ch. 888, title II, § 207, as added

cite as: 50 USC 3937