Don’t do it. You won’t be their friend anymore if they don’t pay and if they have bad credit and can’t get a loan from a bank that’s because they have a history of not paying things. So don’t loan the money if you want to stay friends with this person.

I suggest that you get 2 witnesses, both over the age of 18 and a Notary Public!!!!!
You do NOT have to have these, but it will help.
Just write out the contract & all of you sign it in the presence of the notary. It is a good idea to specify not only the amount of $ but when payments are due AND when the final sum is due, plus what charges will incur if payments are late, etc.

You need the amount of the loan when it is to be paid and contact information any payment information if that is the way it will be re-payed and how many past payments allowed before action is taken then take this paper in duplicate to a notary and have the individual sign it and you as well in front of a notary and they will notarize it and it becomes legal.
Good luck

But i must ask why loan the money if you find a need to have a contract? Depending on the amount of money if they fault it could still cost more to recover it than it was worth in the first place. If i had my doubts about my friend i would just not loan the money it makes enemy’s fast.

write it up how you’d like & when the terms are agreed to, have you, your friend & a witness sign in front of a notary. that would be legally binding in court.

just your & their signatures would be enough, but why not have it even more secure?