Final answer:
Loans are typically used in the integration phase of the money laundering cycle to mingle illegal funds with legitimate ones, creating the appearance of a legal transaction.
Step-by-step explanation:
Loans are generally used in the integration phase of the money laundering cycle. Money laundering is the process of making illegally-gained proceeds appear legal, and it involves three stages: placement, layering, and integration. The integration stage is where the laundered money is returned to the criminal from what seem to be legitimate sources. Loans can be used in this final phase to mix the dirty money with clean money, creating the illusion of a legitimate transaction, thus integrating it into the financial system.