Considering Bad Ending A was a thing because Belial couldn't reform you because you got eaten by a Phoenix, the Bad Ending B pred would need to be equally magical, so my money is on the Curse fella. That is, assuming the ending is you getting eaten. Like you said, could be corruption. Maybe Melo just goes feral and forgets about saving Meli.
I doubt it's the loan system. I'm guessing that's just something the Rich Lion does. He doesn't look magical enough.