A VC does the deal in exchange of a part of the company. They will make their money once you exit, either by becoming public, or by an acquisition. The deal can be different and could certainly include some kind of repayment, but that's not the norm for a VC deal.
A loan has to be repaid though, whether the company exit or not. The terms are fixed and you need to pay them. This can be quite hard when you get a few bad months, while a VC will just get sad if that happens.
Assuming a successful outcome, VC deals are actually more expensive. They cost founders and common holders much more in potential returns. Don't forget about the dividends associated with preferred shares. Those shares are basically earning interest, just like debt.
Given that nobody expects to fail, why wouldn't a company do debt if they can afford it and are credit worthy?
And the bad outcome for both is the same: the company goes broke.
A loan has to be repaid though, whether the company exit or not. The terms are fixed and you need to pay them. This can be quite hard when you get a few bad months, while a VC will just get sad if that happens.