Assalamualaikum ustaz. If a person pays more than what he owed, is it considered as interest?
Alhamdulillah, praise and gratitude to Allah SWT for His countless blessings for us all. Praise and salutations to our beloved Prophet Muhammad PBUH, his family, companions and all those who follow his footsteps until the Last Day.
Debt is the ownership of a certain good to another person on the condition that the person returns the goods back without any addition. 
The practice of paying more than what is owed when paying back a person’s debt is a commendable act and this is done by the Prophet PBUH himself. This is mentioned in a hadith narrated by Jabir Ibn Abdullah R.Anhuma:
كَانَ لِي عَلَى النَّبِيِّ صلى الله عليه وسلم دَيْنٌ فَقَضَانِي وَزَادَنِي
“The Apostle of Allah (ﷺ) owed me a debt; he paid me back and made an addition (of this).” 
Imam al-Nawawi stated in his commentary: It is sunnah for a debtor to pay extra when he is settling his debt. 
Although, the creditor cannot set a condition for the debtor to pay more when he was giving out the loan. This is to prevent interest al-fadhl.
Such is stated in a hadith narrated by Abu Rafie’ RA, where the Prophet PBUH said:
فَإِنَّ مِنْ خِيَارِ النَّاسِ أَحْسَنَهُمْ قَضَاءً
“For the best amongst the people is he who repays his debts in the most handsome manner.” 
Living in a community, it is common to borrow and asking a loan from each other. The reason is a perfect life where one has everything that rarely ever happen to a person. Thus, with the help of friends which will lead to love and respect for the sacrifice of a person for his brother. Hopefully, with the right implementation and sincerity, it will result in blessings for everyone. So true is the statement of Allah SWT:
وَتَعَاوَنُوا عَلَى الْبِرِّ وَالتَّقْوَىٰ ۖ وَلَا تَعَاوَنُوا عَلَى الْإِثْمِ وَالْعُدْوَانِ
“And cooperate in righteousness and piety, but do not cooperate in sin and aggression.” 
Paying more than what is owed is a sunnah of the Prophet PBUH. This matter is considered as hibah or gift of the debtor to the creditor. Thus, the value of the additional payment is decided by the debtor himself according to his capability, however, this is not obligatory for him. However, if the creditor asked for an extra payment from the debtor, then it is an interest al-fadhl which is prohibited in Islam. Hopefully, what is conveyed will open our minds and give us a great understanding so that we can practise the shariah the best we could. Amin.