what should i do if i feel like my friend is being homophobic (i’m an ally)

i personally would just call them out if you catch them being homophobic. like, if someone uses "gay" as an insult i'd always say "hey, that's not cool, can you please use ___ instead?" and explain why it's homophobic. i think that there is no harm in calling someone out and educating them, and if they don't respect that then that says a lot about their privilege and their lack of awareness and care for the LGBT community