Enjoy prison.

Defrauding the jewish banking system is a good way to have the SWAT do an armed raid on your house. If you tell the bank you are taking a loan out for something and don't buy the asset agreed upon in the contract; you will end up in ass rape PRISON faster then the banks will seize all your assets.

Now in minecraft, getting a personal loan where you are not agreeing on an asset purchase and just on a fixed interest rate is only punishable by asset repos. These are usually offered by credit card companies based off of your personal credit limit; and the debt can be erased with bankruptcy (which will destroy your credit score).

How exactly do you “cash out the loan”?

Some of the advice here would be charged as fraud in the cases stated.

Be wary of taking financial advice from people on the internet.