Chart of Accounts

Loan payments come from the bank. They do not reduce the asset value, they reduce the loan amount in the liability account. Loan payments are usually made up of two parts, principal payment and interest expense.

@TylerThompson2092 

Just to confirm, did you set up the loan by making a deposit and assigning the deposit to a loan payable liability account?  If so, you should show both the asset and the liability on your balance sheet.  When you make the payment, record an expense (New > Expense).  Assign the principal portion of the payment to your loan payable liability account and the interest portion to your interest expense account.  That will reduce your cash (asset) by the total amount of the payment, reduce your loan payable liability by the principal, and book the remainder to interest expense.