What annual interest rate applies to an action arising out of a consumer debt where the defendant is a natural person?

• A. 2% per annum
• B. 5% per annum
• C. 9% per year
• D. 12% per annum

Answer: (A)

In cases where a money claim comes from a consumer debt and the defendant is an individual, the law sets a lower, fixed interest rate to keep personal debts affordable and predictable. That rate is 2% per annum. The higher percentages—such as 5%, 9%, or 12%—are used in other contexts, like different types of debts or when the defendant isn’t a natural person. So for a consumer debt action against an individual, the rate that applies is 2% per year, applied to the balance due from the time the debt accrues or from the judgment date, unless a contract or court order specifies otherwise.