How can loud noise cause damage to the ear?

Your ear contains a thin membrane that vibrates when sound waves hit it. The louder the sound the more the membrane vibrates. Just like a drum skin the ear drum can burst if vibrated too much.

The bones in the inner ear are filled with fluid and lined with tiny hairs. The vibration of sound waves moves this liquid and applies pressure to the hairs which your brain interprets as sound. If these tiny hairs are damaged due to excessive noise it can reduce hearing significantly.

Anything above 80 decibels can cause hearing loss.