Both forms are correct. Lose and loose are both correct forms of two different words. They are similar in spelling and in pronunciation. Lose is pronounced as / luz / and loose as / lus /, so we can see that in the second word the ending sound is softer. Both words have different roots, while lose evolved from Middle English losen before X century, loose was first recorded around XII and originates also from Middle English, but from words los, loos. One of the main differences is the function of these words in the sentence. Lose always acts as a verb, while loose is mostly used as an adjective, even though, less commonly, can also be an adverb or a verb. When it comes to meanings, there are no similarities. To sum up, though lose and loose seems alike at first glance, there are more differences than similarities between them.

Correct spelling, see definition and examples below.

Correct spelling, see definition and examples below.

Definition of lose:
Verb: to no longer have something because it was taken away by someone or displaced by ourselves;
I can’t believe I have lost my car keys again!
I didn’t know she lost her mother at such a young age.
– to have less of something or to stop feeling something at all;
After pregnancy, I started losing weight pretty quickly.
Mary lost interest in him completely after the hotel incident.
– to fail in a competition, an election, a game, etc.;
The Yankees lost the game again, it is getting hard to be their supporter.

Definition of loose:
Adjective: not tightly held or fastened in place, not attached to anything;
The coat rack is getting loose again, could you fix it later?
There are a few loose pencils on the desk, take whichever you want.
– not fitting tightly;
She liked loose clothes, you could never see her in a tight skirt.
– not exact, not strictly controlled;
This movie is a loose adaptation of my favorite novel.
Verb: to express emotions freely;
He loosed his anger against his teammates after they lost another game.
– to fire a weapon;
They have loosed their guns as soon as the train with gold arrived.
– to make something less tight;
He loosed the knot on the rope.
Adverb: in a loose manner;
She looked fantastic in this loose-fitting summer dress.