(a)  Interest on loans made under this chapter shall not be paid, deducted, or received in advance, or compounded, and shall be computed and paid only on unpaid principal balances and on the basis of the number of days actually elapsed. For the purpose of these computations, a month shall be any period of thirty (30) consecutive days.

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(b)  If part or all of the consideration for a contract of a small loan is the unpaid balance of a prior loan with the same licensee, then the principal of the new contract of loan shall not include any unpaid interest on the prior loan, except interest that has accrued within sixty (60) days before the making of the new contract of loan; provided, however, that unpaid interest on a prior loan may not be so included in the principal of a new loan more than once in any period of twelve (12) months.