Section 7. Loans not to be effected except under this Act.

Except as provided by or under this Act, no local authority shall, for any purpose, borrow money upon, or otherwise charge, its funds; and any contract otherwise made for that purpose after the passing of this Act shall be void: Provided that nothing herein contained shall be deemed- (a) to preclude any local authority from exercising the borrowing powers conferred on it by any special enactment now or hereafter in force; or (b) to affect the power conferred on any local authority by any such enactment to charge its funds, by guaranteeing the payment of interest on money to be applied to any purpose to which the funds of the local authority can legally be applied