Reorganising cte with case statement

Not sure about the title of your post as there is no CTE in the code you have shared.

A stored procedure with parameters looks to be a good solution e.g. (NB untested)

SET ANSI_NULLS ON
GO
SET QUOTED_IDENTIFIER ON
GO
CREATE PROCEDURE sp_UploadTrans
	@tran1 varchar(30),
	@tran2 varchar(30)
AS
BEGIN
	SET NOCOUNT ON;
	----------------UPLOADING FROM LOANS_TRANS---------------
	UPDATE L
		SET  L.TOT_ACT_INT =  L.TOT_ACT_INT + LT.AMOUNTSUN
		FROM LOANS L
		INNER JOIN
		(
			SELECT IDNO,ID_CODE,TRANS_TYPE, SUM(AMOUNT) AS AMOUNTSUN
			FROM LOAN_TRANS LT
			GROUP BY IDNO,ID_CODE,TRANS_TYPE
		) LT ON L.IDNO=LT.IDNO AND L.LOANUMBER=LT.ID_CODE         
		WHERE  LT.TRANS_TYPE= @tran1
		        
	UPDATE L
		SET  L.TOT_ACT_PRIN =  L.TOT_ACT_PRIN + LT.AMOUNTSUN
		FROM LOANS L
		INNER JOIN
		(
			SELECT IDNO,ID_CODE,TRANS_TYPE, SUM(AMOUNT) AS AMOUNTSUN
			FROM LOAN_TRANS LT
			GROUP BY IDNO,ID_CODE,TRANS_TYPE
		) LT ON L.IDNO=LT.IDNO AND L.LOANUMBER=LT.ID_CODE         
		WHERE  LT.TRANS_TYPE= @tran2
END
GO

which I think can be rationalised down to

SET ANSI_NULLS ON
GO
SET QUOTED_IDENTIFIER ON
GO
CREATE PROCEDURE sp_UploadTrans
	@tran1 varchar(30),
	@tran2 varchar(30)
AS
BEGIN
	SET NOCOUNT ON;
	----------------UPLOADING FROM LOANS_TRANS---------------
	UPDATE L
	SET  L.TOT_ACT_INT =  case when LT.TRANS_TYPE= @tran1 THEN L.TOT_ACT_INT + LT.AMOUNTSUN ELSE L.TOT_ACT_INT END,
	L.TOT_ACT_PRIN =  CASE WHEN LT.TRANS_TYPE= @tran2 THEN L.TOT_ACT_PRIN + LT.AMOUNTSUN ELSE L.TOT_ACT_PRINT END
	FROM LOANS L
	INNER JOIN
	(
		SELECT IDNO,ID_CODE,TRANS_TYPE, SUM(AMOUNT) AS AMOUNTSUN
		FROM LOAN_TRANS LT
		GROUP BY IDNO,ID_CODE,TRANS_TYPE
	) LT ON L.IDNO=LT.IDNO AND L.LOANUMBER=LT.ID_CODE         
END
GO

CAVEAT - I have not tested any of this (but it's the only solution offered after 3 days so worth a look at least)

[EDIT] This article might prove useful: Sql Server - How To Write a Stored Procedure in SQL Server[^]