The Military Lending Act is the one federal rate cap on consumer credit in the United States. It applies to active-duty service members and their dependents, caps the cost of most consumer credit at 36% Military Annual Percentage Rate, and prohibits several contract terms outright. Where it applies, it overrides whatever a state would otherwise allow.
Written by the Loan For Any Purpose USA lending team. Reviewed by the Loan For Any Purpose Editorial Review Team. Last reviewed September 10, 2026. We explain products we do not sell as well as the ones we do.
Who is covered
- Active-duty members of the Army, Navy, Marine Corps, Air Force, Space Force and Coast Guard
- Members of the National Guard and reserves on active duty for more than 30 days
- Spouses and dependent children of covered members
Veterans and retired service members are not covered, although several states extend similar protection more broadly.
What the 36% cap includes
Military APR is deliberately broader than ordinary APR. It bundles in costs that a standard APR calculation can leave out.
- Interest on the loan
- Application and participation fees
- Credit insurance premiums and fees for debt cancellation or suspension products
- Fees for credit-related ancillary products sold in connection with the credit
The practical effect is that a payday loan at $15 per $100 for two weeks, roughly 391% APR, cannot lawfully be made to a covered borrower.
Terms that are prohibited
| Prohibited | Why it matters |
|---|---|
| Mandatory arbitration clauses | Covered borrowers keep the right to go to court |
| Waiver of rights under the Servicemembers Civil Relief Act | Those protections cannot be signed away |
| Requiring allotment repayment from military pay | Repayment cannot be tied to a pay allotment |
| Requiring a vehicle title as security for a covered loan | Rules out title lending to covered borrowers |
| Prepayment penalties | Covered borrowers can always pay early without charge |
The oral disclosure requirement
Lenders must give covered borrowers a clear statement of the MAPR and payment obligation both in writing and orally. That is why lenders publish a phone number specifically for hearing these protections read aloud; ours is Contact us.
How lenders identify covered borrowers
Lenders check the Department of Defense's MLA database, or a credit report containing the same indicator, before extending credit. You do not have to declare your status for the protection to apply. If you believe a lender has breached the Act, complaints can be made to the Consumer Financial Protection Bureau or your state attorney general, and your installation's legal assistance office can advise at no cost.
Our position
We do not extend credit covered by the Act above the 36% MAPR cap, and we check status before funding. If you are a covered borrower, the products on this site priced above that cap are not available to you, and that is the law working as intended.
Frequently asked questions
Who does the Military Lending Act protect?
Active-duty members of the armed forces, National Guard and reserve members on active duty for more than 30 days, and their spouses and dependent children. Veterans and retirees are not covered by the federal Act.
What is Military APR?
A broader measure than ordinary APR. It includes interest plus application and participation fees, credit insurance premiums, and fees for credit-related ancillary products. The cap is 36% MAPR.
Can service members get payday loans?
Not at typical payday pricing. A $15 per $100 charge over two weeks is roughly 391% APR, far above the 36% MAPR cap, so such a loan cannot lawfully be made to a covered borrower.
What terms does the Military Lending Act prohibit?
Mandatory arbitration clauses, waivers of Servicemembers Civil Relief Act rights, required repayment by military pay allotment, vehicle title security on covered loans, and prepayment penalties.
Where can service members get cheaper help?
Military relief societies such as Army Emergency Relief and the Navy-Marine Corps Relief Society offer interest-free loans and grants, and Defense Credit Unions offer small loans well below commercial rates.
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