Banks lend because they make money from the extra charge called interest.

By the time you've paid off your entire loan, you've paid a little bit extra to the bank in interest. This extra "fee" is essentially the lender's reward for loaning you the cash now instead of spending it themselves. Plus, they take on the risk that you might not pay it back.

That extra set of interest payments (on top of the original balance owed) is why banks agree to give out loans. Otherwise, it wouldn't make sense for them to risk putting money in someone else's hands!