(a) Whenever in any statute, deed, written or verbal contract, or in any public or private instrument whatever, any certain interest is or may be mentioned, and no period of time is stated for the rate of interest to be calculated, interest shall be calculated at the rate mentioned by the year, in the same manner as if the words “per annum” or “by the year” had been added to the rate.
(b)
(1) For the purpose of calculating interest, a month shall be considered the twelfth part of a year, and as consisting of thirty (30) days.
(2) Interest for any number of days less than a month shall be estimated by the proportion which the number of days shall bear to thirty (30).
(c)
(1)
(A)
(i) In calculating interest for a partial payment that is made on a consumer loan, the interest shall be calculated to the time when the partial payment was made, and the partial payment shall first be applied to the payment of the interest.
(ii) If the partial payment exceeds the interest due on a consumer loan, the balance of the partial payment shall be applied to reduce the principal of the debt.
(B) The method for calculating interest and applying payments under subdivision (c)(1)(A) of this section shall apply to all subsequent payments.
(2) Interest shall not be added to the principal balance of a consumer loan if a payment falls short of paying the interest due.
(3) Subdivisions (c)(1) and (2) of this section do not apply to commercial credit, including without limitation commercial real estate financing transactions.
(4) As used in this subsection, “consumer loan” means an extension of credit for personal, family, or household purposes but does not include credit card debt, open account debt, or installment loans.
(d) The rate of interest under a contract in which a rate of interest is not specified is six percent (6%) per annum.