A foreign currency loan is actually a speculative deal. The borrower hopes for interest and exchange rate advantages. But that is a risky bet.
A foreign currency loan means that you borrow money in a foreign currency, for example Swiss francs, and you have to repay the loan in this currency as well.
In practice, this is what happens: The bank obtains the loan sum in francs from a Swiss bank, converts it into euros and pays it out to the borrower. To repay the loan plus interest, the borrower gives the bank euros, which it converts into francs and transfers to the Swiss bank.