Hey, so I've been kicking around the idea of enlisting after my senior year, and I've got this burning question about it. If one's deployed with the military, does the military help to cover auto loans or is that totally a 'me' problem? Anyone got any experience or knowledge they could share?
Sure thing! As far as the military goes, they do not provide direct financial assistance to cover the personal debts - like an auto loan - of service members. That being said, when you're deployed, there are legal protections in place that can benefit you. One key piece of legislation is the Servicemembers Civil Relief Act (SCRA).
The SCRA entitles you to a maximum interest rate of 6% per year on all debts, including auto loans, that you incur prior to active duty service. It's essential to note that the reduced interest rate doesn't apply to debts you take on while on active duty.
To get this benefit, you'll usually need to send a written request to your lender along with a copy of your military orders. Some might request it be done certain ways, but the request has got to be made one way or another. This reduction, if approved, will stay into effect for the duration of your active-duty service.
Do note, however, while the SCRA can reduce your interest rate, the actual payments of the loan will remain your responsibility. If you anticipate that making payments might become challenging, it could be worthwhile to have a conversation with your lender about your circumstance - they may be able to work out a modified payment plan with you.
Remember, however, that different lenders have different policies and some may go above and beyond the SCRA, so it's always worth checking out!
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