Hey I've been wanting to make characters based on/inspired by fonts I've seen on here, I'm wondering if that would be an okay thing to do.
Like if I do should I only do it with free for personal use/ 100% free fonts? Would it be an issue if I did it with donateware ones?

I had a similar problem, if you can call it that. My daughter asked me to make her a poster for her room. And there was no way I could turn her down. But the problem was, I couldn't get inspired by any of the fonts. I even started looking at paid options, but even there I couldn't find anything suitable. I was lucky that a colleague at work advised toy story font , thanks to which I made a gorgeous poster for my daughter. Now I am making a poster for her best friend. And I think, maybe I should do it more persistently and start selling them. I don't know yet, just a thought. I hope I helped you a lot and that you are inspired by this font.

DaFontsterz are you asking about modifying a few characters and putting them on a poster for personal use, creating a font from scratch that is only loosely inspired by the existing font, or are you planning on taking a few character from a font, modifying them and publishing them as a new font? ... it makes a big difference.

This sounds like something dependent on the license agreement. I like using fonts with the SIL Open Font License, Version 1.1. These are found in "Public domain / GPL / OFL". This is a hard read, but once you understand it, there are many fonts that use the same license agreement.
I guess it also depends on how closely they resemble the original font.