Old English lað "hated; hateful; hostile; repulsive," from Proto-Germanic *laitha- (source also of Old Saxon leth, Old Frisian leed "loathsome," Old Norse leiðr "hateful, hostile, loathed;" Middle Dutch lelijc, Dutch leelijk "ugly;" Old High German leid "sorrowful, hateful, offensive, grievous," German leid "hateful, painful"), from PIE root *leit- (1) "to detest."
And niðful neddre, loð an liðer, sal gliden on hise brest neðer [Middle English Genesis and Exodus, c. 1250]
Weakened meaning "averse, disinclined" is attested from late 14c. "Rare in 17th and 18th cents.; revived in the 19th c. as a literary word" [OED]. Loath to depart, a line from some long-forgotten song, is recorded since 1580s as a generic term expressive of any tune played at farewells, the sailing of a ship, etc. French laid, Italian laido "ugly" are from the same Germanic source. The sense "ugly" persisted in English into 15c. in the marriage service, where a man took his wife for fayrer, for layther. Related: Loathness.