Solvent as the loan is settled (7)
I believe the answer is:
ethanol
'solvent' is the definition.
(ethanol is a solvent)
'the loan is settled' is the wordplay.
'is settled' indicates anagramming the letters.
'the'+'loan'='theloan'
'theloan' with letters rearranged gives 'ETHANOL'.
'as' is the link.
(Other definitions for ethanol that I've seen before include "intoxicating stuff" , "Kind of alcohol - not hale (anag)" , "constituent for a dram?" , "volatile flammable substance" , "Ethyl alcohol" .)