While people may focus on the interest gained for the loan, I would focus on the return of the principal.
Once a cryto-ccoin is transferred it may be made untraceable - spread through many addresses and exchanged.
In the end a person may not get not only the interest but the principal as well.
Current smart contract platforms (Bitcoin is not one of them) require programming.
Development, debugging and deployment of a proprietary smart contract for a single person is not reasonable.