Yes, a director can charge interest.
However, the company must deduct income tax at 20% and pay this over to HMRC quarterly
There are many reasons why somebody would want to do this
Strictly loans from the company to directors are in breach of the Companies Act, but it's not a criminal offence and in practice nobody really cares if it's a director controlled business. There are tax consequences in that a benefit in kind arises if the loan exceeds £5k at any time in the tax year, and if the loans aren't repaid within 9 months of the year end the company has to form out 25% corporation tax on the loan - refunded after the loan is repaid
Much more to it than that, but brevity calls!