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Remove all the thread from your machine. Install a brand new needle. Raise the presser foot and re-thread the upper thread, making sure you are following the correct threading sequence. Confirm that the bobbin thread is threaded through the bobbincase properly. Now, perform another test stitch. Is the bobbin thread still looping?
If you have already tightened the upper thread tension and the bobbin tension is still too loose, then you may need to tighten the bobbin tension. First, mark with a permanent marker where the slash of the screw head meets the bobbin case. This will mark where the screw was originally set before you begin making adjustments and allows you to return the screw to that position should you need to.
Set the upper tension to the halfway point between the high & low number. This is what would normally be the standard.
Then gently turn the bobbin tension screw to the right 1/8th of a turn at a time. Then test. Keep adjusting until the bobbin thread tension is correct. The tensions are correct when the upper thread and the bobbin thread meet in the middle of the fabric.
rethread top thread on the machine with a heavy weight thread or string, not threading the needle. Pull it out backwards and it will clean out the tension disks. You probably have threads and lint jammed in it.
Most likely the fabric is too light weight to sustain the thread tension using a wide zig-zag stitch. Tunneling will occur in this case.
Loosening the tension (top & bobbin) could also be beneficial.
Sometimes the machine has a special foot (sometimes called overlock) that will help. However, using something to add more body to the fabric, like a wash-away or tear-away fabric stabilizer to the seam or even adding paper will help limit tunneling. Sometimes heavy starch applied to the seamline before stitching will be helpful.
Looping on the top means there is no tension on bottom. The bobbin thread generally rotates counter clockwise. The thread must get under the tension spring. The spring must be adjusted equal to the top tension. This you will have to play with to tighten or loosen as needed. When you sew in a zigzag you might want to loosen the top tension slightly. On a regular basis remove the bobbin case and clean with a qtip. On the race put one drop of sewing machine oil. Clean the bobbin case and replace.