Loaning Money with interest....?

hey all, i was thinking about different ways to make a little money on the side, and came up with the idea of loaning money.

i just have a normal everyday job paying minimum wage, but i have managed to save a little. the hours i work are very unpredictable and i know a lot of my colleagues are short for cash some weeks, but comfitable on others.

what i want to know is... am i allowed by law to loan money to them with interest? or is there some reason i cant do it?

ive got no previous experience in anything like this, so any information would be helpful, problems i may encounter etc. also, any help about writing up a contract would also be of big use to me.

thanks to everyone in advance.