Interest
11.—(1) Subject to paragraph (2) loans shall bear interest at the rate which results in an annual percentage rate of charge determined in accordance with the Consumer Credit (Total Charge for Credit) Regulations 1980(1) of 3·5 per cent.
(2) If the rate referred to in paragraph (1) exceeds the rate for the time being specified for the purposes of any exemption conferred by virtue of section 16(5)(b) of the Consumer Credit Act 1974(2) loans shall bear interest at that rate.
(3) Interest shall be calculated on the principal outstanding daily, and shall be added to the principal monthly.
(4) The index of prices which the Department is required by Article 3(8) of the Order to have regard to in prescribing the rate of interest which loans shall bear shall be the retail prices all items index published by the Office for National Statistics.