Engel, 35, is charged with first-degree murder and interfering with human remains. He is scheduled to appear in court again in Lethbridge, Alta., on Friday.
Engel was under house arrest facing a number of serious charges in Fort Macleod, Alta., court when police arrested him Monday and charged him with Loose's murder.
Documents filed in court alleged the second charge stems from "dismembering the body and disposing it in various locations."
Word of the allegations against Engel horrified Loose's friends.
"It's pretty sickening. He sure didn't deserve that. He didn't deserve anything bad happening to him. He was just a good guy," said Ken Major.
Police say they can't reveal more details about the location of the murder scene and where the remains were found because an on-site investigation is still underway.
Police believe Loose was kidnapped from his rural home near Vulcan on Jan. 8, forced to hand over large sums of money, then was killed and his body dumped in the woods near Claresholm.
When Loose was reported missing Jan. 10, his Vulcan family spent a frantic week pleading that anyone with information about the 77-year-old man step forward. On Monday, police said Loose had been murdered and announced they had arrested two people.
In addition to the murder charge, Engel is facing a number of charges in a separate case, including three counts of uttering threats, two counts of assault, two counts of overcoming resistance, three counts of kidnapping and assault with a weapon.
Engel was arrested in December 2011 on those charges and was on house arrest when he was arrested in connection with Loose's homicide.
He is scheduled to appear in Fort Macleod court on Feb. 1 to face those charges.
The charges are related to a domestic situation, but the female involved is not Engel's common-law wife, Bobbi-Jo Parks, 28, RCMP say.
Parks has been charged with obstruction in connection with Loose's case. She was released on her own recognizance and is set to appear in Claresholm court on Wednesday.
Parks, who has a six-year old boy cared for by her mother, is several months' pregnant with Engel's child.
The mother moved to Claresholm from B.C. more than a decade ago.
