Your situation is different than having a credit card. In the case of the credit card, your expenses in that account would be normally accounted for, hence the need for transfer in and transfer out categories.
In your case assigning transfer in and transfer out as categories would prevent the loan payment from showing up in the checking account pie chart, therefore since you're just paying off your loan, I would suggest that payment from your checking account to your loan be categorized as "Loan expense", while in the loan account you can still use "Transfer in". Assuming there are periodic finance charges in the loan account, that would make your accounting right.