Question: If I owe someone $7.50 and we both don’t have change can I pay him $10 and be mochel the extra $2.50 or is this ribbis?
Answer: The Shulchan Aruch (Yoreh De’ah Siman 160 Se’if 4) writes that even if the borrower did not stipulate at the time of the loan that he would pay interest [which is clearly forbidden min hatorah because of ribbis ketzutza] but when he repays the loan he willingly adds extra payment [that he does not have any obligation to pay] this is also forbidden. The reason that this is also forbidden is because it looks like ribbis (“mechzi k’ribbis” – Ramban and Rosh quoted by the Shach).
However, the Minchas Yitzchok (Volume 9, Siman 88[1]) maintains that if the lender has no intention to return more than the loan, and he is merely “rounding up” the loan for his own convenience (so that he doesn’t have to trouble himself and find the exact change) and the amount of the discrepancy is negligible (for both the borrower and the lender), it is permitted to “round up” the loan, for his own convenience. This concept is also quoted by the Chelkas Binyomin (Hilchos Ribbis Siman 160 s.k. 33).
But this is clearly only allowed if the discrepancy is a negligible amount that people are generally not makpid about. In this situation, the discrepancy of $2.50 is not a negligible amount for many people, therefore it would be forbidden to pay back $10 instead of $7.50.