Loot and Spells can only be equipped when you are resolving a ‘discover’ effect () or a ‘pick up’ effect (). Equipping means placing the card on, or around your Hero Mat.
However, you can always discard a card from your mat as a Free Action on your turn. This is done by placing it into its appropriate discard row. Note that you cannot give a card directly to another hero.
Equipping a hand loot will cover (and disable) one of the starting items or abilities listed on the bottom of the Hero mat. Discarding that loot allows that item/ability underneath to be available for use again. If you are equipping only 1 hand loot you can switch it to the other hand as a free action - as long as you are not in the middle of another action (such as an attack).
Note that there are limits to how many Loot and Spell Cards you can have on your Hero Mat at one time. Each hero may carry a maximum of 2 Hand Loot, 1 Garb, 2 Trinkets and 2 Spells.