She said she said

If the interest is bait then it must be bait for the one *issuing* the loan, not the one paying the interest, which seems rather the opposite of what you were implying. (Unless you're arguing that predatory borrowers use the promise of interest to bait traps for unwary lenders? That would be quite a reversal.)

Anyway, giraffedata was correct: time preference is why those who take out loans must pay interest. The present value to the lender of the money loaned today is less than the present value of the same money a year from now, so the borrower must pay some additional amount back (the interest) to make up the difference. A truly interest-free loan would be a net loss to the lender, which makes such loans very rare indeed.

Time preference is also the reason the borrower is *willing* to pay that interest, as the present value to the borrower of the larger amount to be paid back in a year is less than the present value of the amount received today. This is possible because different people have different time preferences, which also vary over time. Those with higher time preferences borrow from those with lower time preferences for mutual benefit.