I’m in no shape or form an expert, and please excuse the english… But here my explanation goes:
Okay, so assume we have an economy where there are two people: mister Smith and mister Anderson. Say that mister Smith has $200 which he is willing to lend at an interest. Mister Anderson borrows $100 from mister Smith at a 10% interest. Smith now has $100, and Anderson has $100. So there’s still only $200 in the economy.
( And iff this were Frac-Res-Banking with a reserve rate of 10%, Smith would have $190 (200 - 0.1 x 100) and Anderson $100, which means the total amount of money would have been $290 (since you don’t need to give up 100%, but only 10% of the amount you’re lending). This means the purchasing power of the money would have dropped, making goods more expensive (inflation). )
Now, in order to pay back these extra $10, what does mister Anderson have to do? Well, of course, he needs to make $10 somehow. And in this economy of two, the only way he can make money, is either by selling goods or labor to mister Smith. So he works a bit, and sells a few things, and for this Smith gives Anderson $10. Anderson now has $110 (Anderson didn’t spend his borrowed money in this example) and Smith only $90.
Now Anderson pays back $110 to Smith. Smith now has $200, and Anderson $0. Exactly the same as before.
But wait, doesn’t this mean that Smith didn’t make anything? He still only has $200 after all. Doesn’t there need to be more that $200 in the bank account in order for Smith to have made a profit?
No. While Smith still only has $200, he has in fact gained goods and some labor from mister Anderson. So he has still made a profit, just not a monetary profit (instead he has made goods and labor).
So… What happens if Smith were to lend all of his $200 to Anderson? What if all the money in the economy simultaneously was being loaned at an interest? So, what happens when Anderson has paid back $200? He needs to make $20 somehow! He now realises that there is no more money to give to mister Smith… So in order to pay his debt, what does he have to do? Well of course, the only way for him to make $20, is by selling goods or labor to mister Smith. These goods and services would be the “collateral”.
Now you might ask… What happens if Anderson has no goods or labor to sell to Smith? Well, if there was collateral, and Anderson somehow managed to destroy it or whatever, this means Smith suffers a loss. Anderson has “stolen” these $20, since he is unable to repay it either with money or collateral.
If there was no collateral… Well, who in their right mind would lend money out without collateral? This means the risk of not getting money back is quite big. 
The fact that Smith knows with decent accuracy if Anderson will be able to repay him or not, determines if he is going to lend his money out or not (and at what interest). If Smith knows for sure that Anderson would be unable to pay back his money (either in terms of money or collateral), he certainly wouldn’t lend it out. And if he did, he would know for sure that he wouldn’t actually be payed any interest, and thus he would be involving himself in “charity”.
So even though the money supply isn’t changing, people can still make profits (in terms of labor and goods).
The fact that you don’t know for sure if you’re going to get all of your money back, is what gives rise to the risk-part of the interest rate.
The only real, decent reason to be able to create extra money would be to compensate Smith for his loss if he didn’t get the money or collateral back from the person he lent to. As in, the ability to reprint the “stolen money” which Anderson took from the economy in the last example.
Hope that makes sense!