Loosened the Spanish guitar during record peripherally (7)
I believe the answer is:
relaxed
'loosened' is the definition.
('relax' can be a synonym of 'loosen')
'the spanish guitar during record peripherally' is the wordplay.
'the spanish' becomes 'el' ('the' in Spanish).
'guitar' becomes 'axe' (informal term for a guitar).
'during' indicates putting letters inside.
'peripherally' suggests removing the centre (only the 'peripheral' letters in the word are kept).
'record' with its middle taken out is 'rd'.
'el'+'axe'='elaxe'
'elaxe' put within 'rd' is 'RELAXED'.
(Other definitions for relaxed that I've seen before include "Without tension" , "Easy-going" , "Calm" , "Took it easy, loosened up" , "Having put one's feet up" .)