How to make loan payments with connected loans
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The problem is not so much about "accurately categorizing your payments" for online-enabled loans, as it is about a couple of other considerations for such loans.
1.) For traditional mortgage loans (or loans treated as traditional mortgage loans by the lender), I know of zero benefit to enabling such loans for downloading. Quicken can compute a correct loan Payment Schedule for traditional mortgage loans - which means that Quicken can create accurate loan payment transactions that will have the correct principal/interest payment split ... for every payment for the loan. If the user has Quicken automatically Enter the Quicken-created loan payment transactions, the user need make no extra manual effort whatsoever to maintain a manual loan. Each loan payment transaction can be automatically entered in the correct loan payment account register; and if the user is downloading transactions to that account, the downloaded transaction should automatically Match the existing Quicken-created loan payment transaction.2.) For loans other than traditional mortgage loans, it is impossible to generate a loan Payment Schedule that will accurately split the principal/interest amounts for each payment (though Quicken will still generate a loan Payment Schedule for ALL loans). It is impossible because loans that are not traditional mortgage loans (such as the "simple interest" loans used for most auto loans) determine the principal/interest split based on the date that the lender posts the loan payment. Quicken could only know that date AFTER the payment was posted by the lender, and ONLY by logging on to the lender's web site - hence the ONLY potential value of downloading loans that are not traditional mortgage loans. Sadly, among their multiple drawbacks, downloaded loans are not even 100% reliable at getting the loan payment principal correct all the time. For reliability, it is still better to use a manual loan and manually modify each Quicken-created loan payment to have the correct principal/interest split.
And the outlook for online-enabled loans isn't quite as limited as the op suggests when he says: "I have the payment in my checking account register, but it cannot be recorded as a transfer to the loan account. There is a loan payment category, but that would be inaccurate since some of the payment is interest and some pays down the loan."
While that statement is true as far as it goes, it implies a Quicken limitation that is not present. The user can create their own loan payment transaction in the same form that Quicken uses: a split transaction with one split line for the principal (but recorded to a regular Category rather than as a transfer to the loan liability account), a second split line recorded to an appropriate interest Category, and any additional split lines (such as a transfer to an Escrow account).
Having said that, I have two mortgage loans and one auto loan; and I have never considered enabling any of them for downloading.
[Note:- It is been said by some that it there is no loan liability account register for online-enabled loans. That's not true: it's there, it just can't be viewed/directly-altered by the user.
- It has also been said that the user can not see the transactions created by Quicken for online-enabled loans. Also not true: a Banking > Transaction report for the loan liability account will display all the transaction in that online-enabled loan liability account account.
- Finally, I just discovered that the transactions in the register of an online-enabled loan account can have a couple of their fields modified. Both the Tag and the Memo fields of transactions in an online-enabled loan account can be modified using the Banking > Transaction report - by selecting the transaction(s), then clicking the Edit button (IN THE REPORT). ]
[Note: I think there is a bug in Quicken which manifests itself when the user modifies the principal/interest split for a loan payment transaction to anything different than what the Quicken loan Payment Schedule says (such as is done for manual simple-interest auto loans). After the split is modified, Quicken modifies the loan payment Reminder "Amount due" ... which must be corrected before entering the next loan payment. Happens every time with my auto loan. Quicken should at least have an option to ignore such user loan payment transaction modifications for loans such as auto loans.]