But with bitcoin you can't loan money that doesn't exist.
Bitcoin will never replace FIAT. They'll coexist. If bitcoin will be deemed as the only currency that we can use then lending is possible. People will always try to find ways to lend out money. How can we use bitcoin as a mode of payment if it doesn't exist?
I actually do not see that happening either. We are talking about the decentralized space here and everyone abandoning fiat and then the government doing nothing about it, it cannot work that way.
Even if we peradventure, get it to work and maybe in a way we have a large set of people all over the world making good use of it, I still do not see how fiat would still not be in existence, as there would be some fractions in the world that would not even have access to this and possibly they may just want to stick with the usage of fiat and all the other opportunities they may get from it, and with that I believe bitcoin would just be another alternative way to spend.