Resources: understanding loans

In our current game, we're really digging into the Resources mechanics. We've used them at a fairly cursory level before, but now we're getting into the weeds a bit, and finding the game is really benefiting from exploring that space. However, we've hit a small snag and are trying to figure out how the mechanics map to the fiction.

I understand that loans are just cash or funds with strings attached, and I understand how cash and funds work. What I'm confused about is the difference between debt-free loans and... non-debt-free loans? The language of the paragraph under *Debt* (p. 375) is a little murky. If I'm reading it correctly, "debt" here refers solely to interest? The phrase "if it must be paid back" in the rulebook is confusing - what is a loan, if not something that must be paid back?

Based on my understanding, here's how I think it goes. If my well-heeled friend loans me a few sous (1D of cash generated at Ob 2) and says "just pay me back when you can," then I simply owe that friend a cash die (whether I scrounge it up with an Ob 2 Resources test myself, or acquire it through other means), and that's all the mechanics have to say on the matter. If my rival loans me the same sum, but tells me that he expects that a gentleman would pay him back with interest (i.e., the loan comes with interest), then I've got a cash die but also a debt of size 2 (because the cash die my rival gave me required an Ob 2 Resources test). Barring any other arrangements we might come to over the course of the story, my next lifestyle test has +1 Ob, and if successful, my debt is now size 1, and I'll repeat this again next lifestyle test and hopefully reduce it to 0 and be clear of the debt entirely. No mention is made of the original sum, so presumably I've paid the original few sous and then some over the course of those two lifestyle tests.

Do I have that correctly? If not, where am I mixed up? Thanks.