It isn't worth your headache, not to mention you could do something else with the money upfront and make more interest on it in however long he wants to pay you, or you could buy yourself a newer car, sooner and get all that use out of it, that you might have otherwise had to wait for. There are also laws about loans, and how much interest you can charge before it becomes illegal, so if I were you I would set it up as a purchase price of 8500 with 0 interest paid over however many even monthly payments. You should also put penatlies on it, like $50 for late payments. I still think it's a rotten idea...as someone mentioned earlier, it tells you A LOT that he can't get a loan from his bank, and if his parents didnt help him get a loan from a bank, they sure as hell arent going to help him get one from a private lender.