What should we do regarding an interest-bearing loan that our father took out before his death and was unable to repay, and we do not have sufficient money to repay it?

You must pay off your father's debt as an act of filial piety, and you should return the exact amount he borrowed without any interest. You should advise the creditors to take only the original amount, and negotiate with them so that they receive nothing more than their principal. Pray for forgiveness and mercy for your deceased.