I'm not sure I understand how a repaid loan burns money.

So, a customer takes a loan, and with that money pays for a house. The house owner gets that money (usually from the bank, directly, although that money passes briefly through your pockets as well). That's actual money that is in circulation.

Now, you have to pay back to the bank what you took from it, over 30 years, with interest. The bank indeed keeps the interest, but the money you pay to it is going back into their reserve - from where they took what they gave to the house owner.

I know how fractional reserve works, and how banks can offer more money than they actually have (or can back up), and my point is that in this process, no money gets burned in any way. On the contrary, more artificial money is created (fractional reserve) and customer has to generate more value than the actual loan, to pay for bank's risk.