Ah, I see.
“For example, I have a family member who is paying credit card debt (which is a terrible waste of money). I want to pay off the debt on their behalf – but without letting them skip out on the lesson of the pitfalls of financial indiscretion. I think one way to do this would be to hold them to a punishing payback schedule so they can see what it would cost to pay for their mistakes (and as a side point- I plan on gifting the extra money back when they manage to finish paying).”
I’m sorry, I answered too quickly. You may certainly make them pay the actual credit card debt with it’s accrued to date interest, as this is the sum you put out. But you wish to cut – and I understand why.
But if you’re not speaking of a minor and you’re speaking of a family member that you are not fiscally responsible for, then I believe Rav hava mina would not apply – they would be like any other person, as the chazakah that you are not makpid on them does not apply, as they are not reliant on you. The Gemara explicitly says “Banav U’Bney Beso” – aka, though who are reliantly upon him. Since their needs are essentially his, any fiscal transaction between are pretense. The Gemara, still forbids this based on chinuch.
But you speak of an adult who is not reliant on you. The Gemara wouldn’t apply.
I believe that it would be Ribbis D’Orayasah (as it would be ketzutzah) then, which regardless of your intentions would be ossur. Which is forbidden even if the borrower says that the ribbis is a gift. Due to the fact that in your case the borrower is a totally separate financial entity. There is no chazakah in your case ( assuming this person is not financially reliant on you).
I would suggest signing a heter iska with a merciless “profit” rate. What you do in the future would be irrelevant. they are relatively simple and straightforward (but make sure you and your – well, victim- fully understand it’s terms for it to be halachicly & legally valid- Rabbi Reisman has a few english versions in the end of his sefer).