Say you go to a dealership and buy a car for $20,000.
You sit down with the finance manager and they run your details through the computer.
Wells Fargo pops up. They can loan you the money less downpayment of $1,000 to the dealer.
You agree to the terms, make the downpayment and off you drive home in your new car with your title and registration.
The dealership sold you a car, the bank created a credit entry of -$19,000. You have to pay that money back to the bank with interest but where did the bank get the $19k from to pay the dealer?
Other than your downpayment, no physical money changed hands.
If that isn't creating money out of thin air I don't know what is.