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Q . I have a car loan with Capital One Auto Finance and when I signed the contract it said that the monthly note will be $349 per month. The beginning loan balance is $16,684 with an interest rate of 14.35 percent for 72 months. It is a simple interest calculation and according to this it should be $346 per month. Capital One refuses to make the adjustment. Could you help me please.
Cynthia Payton
Baton Rouge, LA

A. Cynthia, it sounds like you plugged your numbers into an online calculator, which is great – I like when consumers do research, and I'm glad you noticed something was up. However, the issue here is that your calculations haven't accounted for the period of time between when you took out the loan and when you made your first payment.

In your case, that stretch was 45 days, says Pam Girardo, a spokesperson for Capital One.

"This customer has a simple interest auto loan. She also needs to take into account the interest that accrued over the number of days to the first payment. A loan taken out on Aug. 25, 2006 with a first payment due on Oct. 9, 2006 would accrue 45 days of interest, which affects the monthly payment amount. This amount is factored in upfront and influences the ongoing monthly payment amount."

With a simple interest loan, Capital One calculates the actual finance charge by applying the annual percentage rate to the unpaid balance of the amount financed on a daily basis until it's paid off in full. Your payments are posted to the interest owed first, then to the principal owed.

If you're interested in paying your loan off a bit faster and you have some extra money to put towards it each month, you can always pre-pay. Girardo says there's no fee for doing so, and it will save you money on interest.

Consumer Ally problem solver Jean Chatzky is the "Today Show" financial advisor, a longtime financial journalist and best-selling author.

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