<prompt> Human: Edit: I should probably clarify that Im using the term friend loosely. I was thinking more along the lines of a classmate or two. I could lend them money for textbooks or buy the textbook with a legal expectation of being paid back and perhaps collect some interest.  <response>: Yes, you can. You would both have to sign a contract examples can be found online. You also can find normal interest rates for a personal loan online. If he would fail repaying you, you can sue him for the remaining amount, but of course suing somebody does cost money. Generally speaking on rpersonalfinance we warn against lending money to friends. A. the relationship often changes from friend-friend to lender-borrower and B. often its not smart use of your money, and you may lose some of your money on this. 