Baggy clothes are loose-fitting. Sometimes kids wear their pants so baggy that their legs look like toothpicks in a lunch bag. It’s easy to hide in baggy clothes, and they’re usually really comfy.
The adjective baggy describes oversized or roomy clothes. A baggy t-shirt and ripped-up pants probably isn't the ideal outfit for a job interview. You can also talk about baggy skin — you might say that your friend's baggy eyes betray the fact that he stayed up late finishing his English paper. Baggy comes from bag, with its Old Norse root, baggi.