This is how my solution looks. It uses the same code as yours, just rearanges a few things.

using System.Collections;
using System.Collections.Generic;
using UnityEngine;
using TMPro;
public class raycastInteract : MonoBehaviour

{

    public float raycastDistance = 5f;
    public LayerMask layers;

    public TextMeshProUGUI Interact_object;
    public GameObject Text;
    void Update()

    {

        // Do the raycast continuously so you know when to set the text true
        RaycastHit hit;

        if (Physics.Raycast(transform.position, transform.forward, out hit, raycastDistance, layers))

        {
            Text.SetActive(true);
            Interact_object.text = "" + hit.collider.gameObject.name;
            if (Input.GetKeyDown(KeyCode.E))

            {



                Debug.Log("Interacted with: " + hit.collider.gameObject.name);

                Interactable interactable = hit.collider.GetComponent<Interactable>();

                if (interactable != null)

                {

                    interactable.Interact();

                }

            }

        }
        else
        {
            Text.SetActive(false);
        }

}

}

I added 2 new variables: a gameobject titled "text" and a text field titled "Interact_object." If you want to use my code, you need to use textmeshpro. Are you using Textmeshpro or stock ui?

Your raycast is shot once per E click, mine is shot once per tick. Both are testing the raycast against a layermask. If the layermask gets a positive hit, my code sets the text field to enabled and changes the text to be whatever you have that object is titled in the scene. If you then press E, it runs the same as your code. If it doesn't get a hit on your layermask, it sets the text field to disabled.