Q. I am following the balance on my auto loan using a computerized spreadsheet. After three years my bank says I still owe a lot more than I think I should. Do you know why?

A. You were probably stuck with an add-on loan.

Most car loans are simple interest loans -- an assumption you've probably made on your spreadsheet. You make the same payment each month, with part of the money paying the interest charge and part paying back the principal you borrowed.

But the key thing about simple interest loans is that you only pay interest on the monthly balance. Since that's constantly being reduced, a larger and larger share of your check goes towards paying off the balance.

Unfortunately, some dealers will try to make a little extra money on some sales by signing the buyer up for an add-on loan.

These loans require you to pay interest on the full amount you borrow for the entire term of the loan. The portion of your check that goes for interest and the portion applied to the principal never changes.

Your spreadsheet expects the interest charge to decline each month. But with an add-on loan it does not, and less of your check is going to repay the debt than you think.

We suspect that's causing the discrepancy. Check your loan agreement.

You can also use our auto loan calculator to check your math. It also assumes you have a simple loan.