Truth in Lending Act (TILA): Federal law requiring specific disclosures about loan terms and costs, applicable if the lender regularly extends consumer credit, even for friendly loans

State Usury Laws: State-specific laws that set maximum interest rate limits. Exceeding these limits can make the loan agreement unenforceable. Rates vary by state

Statute of Frauds: State laws requiring loans above certain amounts to be in writing, generally applying to agreements that cannot be performed within one year

Internal Revenue Code: Federal tax regulations covering minimum interest rates (Applicable Federal Rate), tax implications for both parties, and gift tax considerations for below-market-rate loans

Uniform Commercial Code (UCC): State-adopted uniform laws governing secured transactions when the loan involves any security interest in personal property

State Contract Laws: Basic contract formation requirements including consideration, capacity to contract, and legal purpose requirements specific to each state

Bankruptcy Code: Federal laws determining how the loan would be treated in bankruptcy proceedings and the priority of friendly loans versus other debts