Universal basic loan
This website is supposed to be technical questions and not opinion-based, so I will try to respond to two technical questions I can extract from the question.

The first question: is the loan “less expensive”? The obvious response is: how big is the loan? Note that if the loan is not too large, it would be similar to student loans, an existing programme. The analysis of the programme would overlap that of student loans. However, the loan programme being cheaper is an apples-to-oranges comparison: what happens when a person cannot pay back the loan? They are cut off from support, which is what the UBI provides.

There are other questions here about Universal Basic Incomes, which may help answer questions.

The second question I see is whether the loan rate could replace taxes. This seems implausible with the current size of government. The US Federal government has a current tax take that bounces around 20% of GDP. (Other countries will have a larger tax burden, but there are also state and local taxes in the US.) At a loan rate of 5%, that would require the loan principal to be 400% of GDP to match amounts. A debt level of 400% of GDP is well above private sector debt levels seen in practice, and would probably unsustainable (could not be paid back). Although my comparison is somewhat apples-to-oranges, it indicates that taxes are much larger flows than plausible interest payments.