Amortization is the gradual repayment of a loan through scheduled, usually equal, payments. Each payment covers the interest accrued on the remaining balance, with the remainder reducing the principal.
Early in the loan, the balance is large, so most of each payment goes to interest. As the balance shrinks, more of each payment reduces principal — accelerating the payoff toward the end. An amortization schedule lays out this split for every payment.
See a full schedule in action with the Mortgage Payment Calculator or the Loan Payment Calculator.