1 general:: Relax, take it easy, as in Just hang loose and it will all work out. [Slang; mid-1900s]
American Heritage Idioms
2 general:: Phrase(s): hang loose [and] stay loose to relax and stay calm. • Just hang loose, man. Everything’ll be all right. • Stay loose, chum. See ya later.
McGrawhill's American Idioms And Phrasal Verbs