What are my rights under the Military Lending Act?

The MLA applies to active-duty servicemembers (including those on active Guard or active Reserve duty) and covered dependents.

Your rights under the MLA include:

• A 36% interest cap. You can’t be charged more than a 36% Military Annual Percentage Rate (MAPR), which includes the following costs in calculating your interest rate (with some exceptions):
  • Finance charges,
  • Credit insurance premiums or fees,
  • Add-on products sold in connection with the credit, and
  • Other fees like application or participation fees, with some exceptions.
• No mandatory waivers of consumer protection laws.  A creditor can’t require you to submit to mandatory arbitration or give up certain rights you have under State or Federal laws like the Servicemembers Civil Relief Act.
• No mandatory allotments. A creditor can’t require you to create a voluntary military allotment in order to get the loan. An allotment is an automatic amount of money taken from your paycheck to pay back your loan.
• No prepayment penalty. A creditor can’t charge a penalty if you pay back part – or all – of the loan early.

Tip: If you have an issue with a consumer loan, you can visit the JAG Legal Assistance Office locator  to find help. You can also ask your installation financial readiness office for information.