Loose was named partly after the spontaneous, creative decisions Furtado faced while creating the album and also for the band TLC, who she said she admires for "taking back their sexuality, showing they were complete women." For the first time, Furtado worked with a variety of record producers and followed a more collaborative approach in creating the album. The album, mostly produced by Timbaland and Danja, showed her experimenting with a more R&B–hip hop sound and the "surreal, theatrical elements of '80s music". She has categorized the album's sound as punk-hop, which she describes as "this modern, poppy, spooky music" and stated that "there's a mysterious, after-midnight vibe to [it] that's extremely visceral". She attributed the youthful sound of the album to the presence of her two-year old daughter.

Furtado also wanted the album to sound more like her demo tapes which she prefers over her finished albums. She recalls, "The cool thing is we did the mixes as we went. The whole album is a board mix theoretically. We didn't bring in the fancy mixer at the end". During the album's creation, she listened to several electro and hard rock musicians including System of a Down and Death from Above 1979 who influenced the rock sounds present on the album and the "coughing, laughing, distorted bass lines" which were kept in the songs deliberately.

Timbaland and Danja produced ten of the twelve tracks on the album, and another producer featured on the album is Lester Mendez (of Shakira's "La Tortura"). Juanes, with whom Furtado collaborated on the hit record "Fotografía" from his Latin Grammy Award-winning album Un Día Normal, appears on the album. Furtado also recorded with producers The Neptunes, Nellee Hooper and Scott Storch, but none of their songs made the final cut. Another song, "I Am", leaked to the internet in early 2006, and rumours circulated that it would be on the album's final track listing.

On June 7, 2006, it was reported that Coldplay lead singer Chris Martin's vocals in "All Good Things (Come to an End)" would be excluded from the song after a request by Martin's label EMI. The song is still on the album, but only Furtado's vocals are featured. On June 27, the version of "All Good Things (Come to an End)" featuring Martin's vocals was leaked onto the internet.