One more thing to know. In order to qualify as a loan, you must charge a minimal interest rate. You can find these at https://www.irs.gov/applicable-federal-rates. If you don't charge at least that rate, the IRS would consider it as a gift. Also, with the written contract, you have options in case the borrower does not repay the loan. The IRS will allow you to deduct the unpaid amount as a bad debt.
