Loan amortization is the process of paying off a loan over time through regular payments. Each payment consists of both principal and interest, gradually reducing the total amount owed. This method helps borrowers understand how much they need to pay each month and how long it will take to fully repay the loan. The amortization schedule outlines each payment's breakdown, showing how much goes toward the principal and how much goes toward interest. This schedule helps borrowers track their progress and see how their debt decreases over time, making it easier to manage finances and plan for the future.