You should inspect your pad thickness. It sounds to me the pad is at the smallest thickness.

Your rotor can use a cut also.

 

Don't think the brake pad clips should be extremely loose. They're usually hard to put on and stay in place the times I've done my front brakes on an 05 Corolla. Usually still very tight and take some effort to get them off when they're replaced. The clips look like this:

Usually they come with new pads. But if they've been deformed by heat or damaged, one can buy replacement clips.

Obvious things to do, regrease (with proper brake grease) the various grease points on the brake pads that are recommended for your 03 Corolla. There is also a spray you can buy (CRC De-Squeak Brake Conditioning Treatment for example) to spray on the various brake parts to reduce squeaking or squealing. Or use some Brake Cleaning spray and see if that helps.

One should at the very least, as previously suggested, inspect the pads themselves to ensure they are not worn down to the point the wear bar/clip (or what ever it's called and assuming its even installed) is making contact with the rotor.

 

Remove the caliper (2 bolts) and see what the pads look like and see if you can see if anything is rubbing. If the inner brake pad is smaller than the outside one, switch them. Lubricate the slider pins and re-assemble for a test drive.
If those clips are loose, try to snap them back in place or replace them. If you need new pads, choose a set of pads that come with new clips from Rock Auto.Good luck...

 

Looking at your photo there is a spot where the rust is down into the wear surface of the brake rotor (1 o'clock with top of rotor being 12 o'clock) . Most likely cause of that is using a hammer to remove the rotor sometime in the past. I think you should either resurface or replace the rotor. The anti rattle clips that are loose need to be replaced as they have been subjected to forces that could cause them to fall apart. You can try bending them to make them tight and you could remove the rust on the edge of the rotor with an abrasive as a temporary cure but (if affordable) replacement is the solution (rotor and anti rattle clips).

 

Brake assembly is far overdue for a rebuild.I replace the pad support plates(Toyota's designation) every four years along with the pin boots and pin bushing. Never have found one loose. The pads hold them in place plus there are several tabs on the plates to keep them in position.I think Toyota specs call for pad minimum of 1mm. Regards

 

I think your rotor is the cause

 

The first image looks like the brake pad hardware on the top is detached from the caliper bracket. The clip should sit in the grooves and not pop off. You might need pads as well.


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