[s_dev]

>The bank also needs to pay the loan back by an agreed uppn time (which destroys the money).

Perhaps you can clarify by what you mean by 'destroyed'.

To my knowledge once the bank has 'created' the money it will always exist in the system. However it has devalued all other money by a small amount which we understand today as 'inflation'. So it's not clear to me what you mean by destroyed.

[qubex]

“High-powered money” is that which is created when the central bank lends to commercial banks. As it is a claim on the central bank’s assets, when it is returned to them it ceases to exist (as the central bank doesn’t need extra paper to dispose of its own assets).

[kasey_junk]

The destruction mechanism is the same as the creation mechanism but in reverse.

An asset is removed from the lendee in the form of a debit against their deposits thus destroying outstanding cash.

[nradov]

When a borrower defaults then some fraction of the outstanding balance is destroyed.