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I wanted to bring this thread up again because I believe it is CRITICALLY important for every military family to understand. Also, we had no idea it existed until a few months ago. I think every NCO needs to understand what this is and to tell their soldiers how it can benefit them. I know a lot of military families that are in trouble financially. Let's face it, most of us have made financial mistakes before. My family has benefited from the SCRA earlier this year with one car loan and a credit card. Submitting the paperwork not only completely paid off the entire credit card, but the company even mailed us a refund on top of that. We just found out today from another company that if you re-enlist you can re-submit your paperwork for a loan (ours was for auto) taken during your previous enlistment. This was news to me as before it was only loans prior to military service. Please take a moment to read this over and think about discussing the SCRA with your soldiers.
Do you understand your SCRA benefits? | RallyPoint
Posted from rallypoint.com
Finance
Military Family
Enlisted
Re-enlistment
Posted 7 y ago
Responses: 1
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So if I'm understanding this correctly, if I get activated, any account I have that has an interest rate attached will have that rate dropped to a max of 6%?
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Norah Julmis
Yes. In some cases, if they are a military-friendly company they may drop it even lower. When you call a company, see if they have a military division. From what I've come across, the regular customer service has NO idea what we're talking about. You have to submit paperwork, and a copy of your orders. The process has taken from as little as two weeks, to 2 months depending on the company. USAA and Bank of America are both pretty quick. The auto companies will probably take longer. I know BoA has a military division.
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Norah Julmis
I'm also going to add this for other people-if you are able to do this for an auto loan, they might take several thousand off your car and tell you that you won't have a payment for another several months. What you can do, to pay even less money, is to set aside your monthly car payments, and pay big lump sums at a time. So, like twice a year pay $2,500 or something and you will pay reduced interest-like 2% on that payment. Companies are really sneaky with their interest charges and hidden fees. Always read the fine print because they aren't likely to tell you that as they lose money that way.
In addition, for home loans, some lenders will make you pay a penalty fee if you pay extra or additional payments for your home (because this lessens the amount of interest they get from you over the time of your home loan). If you haven't bought a home, shop for lenders. I do know that Veteran's United does not charge you a penalty. This way you can plop your re-enlistment bonuses or tax refunds directly on your home's principal balance.
Before you finance ANYTHING calculate the payments + interest x the months you will be paying. The photo I attached is a sample for those young people they finance an expensive car with a high interest rate. You can see you THINK you'll be paying $30,000 for the car when you will actually be paying over $40,000 for it over the next 5 years.
In addition, for home loans, some lenders will make you pay a penalty fee if you pay extra or additional payments for your home (because this lessens the amount of interest they get from you over the time of your home loan). If you haven't bought a home, shop for lenders. I do know that Veteran's United does not charge you a penalty. This way you can plop your re-enlistment bonuses or tax refunds directly on your home's principal balance.
Before you finance ANYTHING calculate the payments + interest x the months you will be paying. The photo I attached is a sample for those young people they finance an expensive car with a high interest rate. You can see you THINK you'll be paying $30,000 for the car when you will actually be paying over $40,000 for it over the next 5 years.
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Norah Julmis
This is an example on a $200,000 home loan over 30 years. If you only make 12 monthly payments a year you will pay around $343,000 for the home after interest.
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