require-relative simplifies module loading in Node.js by providing a straightforward way to require files relative to the current module's location. This eliminates the need for complex path manipulations, especially in deeply nested directory structures. It offers cleaner, more readable code, promoting better maintainability. By resolving paths relative to the file making the require call, it prevents common errors associated with absolute or project-root relative paths, enhancing project portability and organization within npm packages.