Regulation 4 Interest on loans

An agreement shall require the periodical payment of interest in respect of the loan.

Subject to paragraph (3) below, the agreement shall provide that the rate of such interest shall be the rate determined by the Treasury under section 5 of the National Loans Act 1968^f1 to apply to a loan from the National Loans Fund made on the same day for a comparable period and on comparable terms.

In the case of a loan under regulation 3(1) above, the agreement shall provide that if it appears to the appropriate authority, having regard to all the circumstances of the case and, in particular, the educational and financial viability of the school, expedient to do so, the authority may give a notice to the governing body that the interest payable under the agreement on and after a date specified in the notice shall be at a rate so specified, being the rate which would be payable under the agreement by virtue of paragraph (2) above if the loan were to be made at the date of the notice.