The loathly lady, is a tale type commonly used in medieval literature, most famously in Geoffrey Chaucer's The Wife of Bath's Tale. The motif is that of a woman who appears unattractive but undergoes a transformation upon being approached by a man in spite of her unattractiveness, becoming extremely desirable.

Is Loathly a real word?

Loathsome. (rare) Unwillingly; reluctantly.

What does Loathy mean?

obsolete loath evil, harm, hatred (from Middle English loth) + -y.