Should you refinance your auto loan or trade in your car for a new one?

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

 

Regular auto payments can be a drag on your household finances. Consider that the average U.S. monthly auto payment for a new vehicle is $554, and for a used one is $391, according to data from Experian. And 84-month loans are becoming more common according to the agency. Seven years is a long time to be spending $554 per month. Avoiding having to make regular car payments, however, isn’t easy.

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Even reducing the amount is tough. Often it comes down to either trading in your current car for a more budget-friendly car payment or refinancing your vehicle at a lower interest rate, which could lower the amount of your monthly payments.

 

What’s a better option for you? Let’s take a test drive and see if a trade-in or a refinancing deal can help with your high monthly auto payments.

 

Related: Smarter ways to get a car loan

Refinancing an Auto Loan vs. Trading In Your Car

If you’re finding that your car payments are too high, you might be looking for ways to reduce them. Among your options are refinancing your car loan or trading in your car for a cheaper one (which can also involve refinancing your loan). Both strategies can help you reach your goal of shelling out less every month. But each one has its unique features, and it’s worth understanding them both before you make a decision.

What It Means to Refinance a Car

Refinancing an auto loan means getting a new car loan that replaces your old one, ideally at a significantly lower interest rate. The new loan pays off the old loan in its entirety. It also offers you new payment and interest rate terms that could result in lower monthly auto loan payments, thus potentially freeing up money for other household financial uses and obligations.

 

You might consider refinancing a car loan if your credit rate has improved (which might lead to better deals on loan interest rates) or if your original auto loan deal came with a high-interest rate and rates have since dropped, so you think you can get a better deal. You may even refinance to a longer loan term to reduce your monthly payments, though that likely means you will have to pay more over the life of the loan.

Pros and Cons of Refinancing an Auto Loan

Like any consumer loan, an auto refinancing deal has its upsides and downsides.

Pros of Auto Refinancing

 Naturally, there are many potential benefits of auto refinancing:

  • May be easy to get. Banks and lenders are usually amenable to refinancing your auto loan. As long as your credit score is stable, most auto loan financing companies will be open to redoing your car loan. This can be a “con,” however, if you start chasing interest rates and don’t pay attention to loan fees and terms. It’s wise to compare interest rates at your own financial institution (after all, it knows you best) and online with an auto loan aggregator that can tailor a loan package to your financial needs.
  • Can lower your interest rate. A lower interest rate can save you money. Saving money is the name of the game with an auto refinancing loan and that game starts with a lower interest rate on a refi auto loan than the one on your original auto loan deal. In general, if interest rates are lower than they were when the car was originally purchased or if your credit is more robust than when you signed off on the first loan, chances are good that you can earn a lower interest rate by refinancing.
  • Can stretch out auto loan payments. By refinancing, you can also change the repayment terms and timetable of your original loan. Say, for example, your original loan stands at 36 months. By refinancing into a 60-month or 72-month loan repayment, you should be able to cut your monthly payments down to size. Just bear in mind that this will likely mean that you pay more in total over the life of the loan.

Cons of Auto Refinancing

There are also potential disadvantages that can come with refinancing your car loan:

  • Longer loan terms can cost you. If you do refinance into a new auto loan with a longer repayment timetable, you’re running the risk of adding to the total cost of the vehicle. That’s because the total repayment for a shorter loan (say, 36 months) is less expensive than the total for a long loan (say, 72 months) because the total loan is paid down more quickly, meaning total interest costs are lower on a shorter loan.
  • Depreciation may cost you. Auto lenders may not want to lend you money for a car that’s not worth the cost of the loan. Unfortunately, vehicles—even brand-new ones—depreciate rapidly. If you purchased a car with a low or no down payment, or if the vehicle has aged and lost much of its value, it could be an uphill climb getting a new auto refinancing loan.
  • Your old loan may cause problems. It’s much more difficult to refinance an auto loan if you’ve missed payments on your original loan (that makes you a high credit risk in the eyes of lenders). And you may be less willing to refinance if your original auto loan has a prepayment penalty (which can add to the total cost of refinancing into a new loan). Check the fine print on your old loan and make sure you’re caught up on payments before applying for a new auto refinancing loan.

What It Means to Trade in a Car

Trading in your vehicle for another vehicle with a lower payment may be more doable than you would guess. Simply stated, trading in your car means switching out an old vehicle for a new one. Auto consumers trade in their cars for myriad reasons. Most relevant here, they may use their trade-in vehicle as a financial asset to curb the price of a new car purchase.

 

In this scenario, the value of your current car matters to the auto dealer. If you owe less money on the vehicle than an auto dealer is willing to offer you as a trade-in, that dealer may likely take the cash overage on your trade-in amount and apply it to your new vehicle purchase.

 

One note of caution: If you owe more on your old car than its estimated value, you likely won’t succeed in getting a good trade-in deal. Or you may need to pay off the difference or have it tacked onto your new loan.

 

Auto consumers may also trade in their vehicles because they can’t afford the payments any longer but still need a vehicle. In that scenario, trading in a more expensive vehicle for a less expensive one can take the financial pressure off a car owner, while still giving them a vehicle to drive.

Pros and Cons of Trading In a Car

Just as with refinancing, there are several pros and cons involved in a vehicle trade-in, too. This is especially true if you’re doing so to save on auto payments.

Pros of Auto Trade-Ins

There are many potential benefits to trading in a car:

  • Can be fast. You can close a trade-in in just one day. Trading in your vehicle for a less expensive one isn’t all that complicated. You drive to the dealer lot or use an online platform like Carvana, CarMax, or AutoNation, get an offer on the trade-in, and close the deal. Remember, auto dealers are in the business of getting you into a new vehicle and a trade-in is a perfectly appropriate way to do that. Dealers are also adept at selling your old car at top value, so the financial incentive for cutting a deal with an auto dealer is fairly high. That’s all in your favor when you’re trading in a vehicle.
  • You get a second bite of the “new car apple.” When you trade in your old car, you have another chance to get a car with the features you want, such as four-wheel drive, more trunk room, or better gas mileage. While it’s true that your trade-in vehicle was probably worth more than the new vehicle you’re getting, there’s no reason your new set of wheels can’t have features you like but weren’t getting in your old car—within reason.
  • A fresh start on a new loan. When you trade in a newer car for a less expensive one, chances are you’re going to wind up with a lower auto loan payment—and that may be the biggest “pro” of all. Whether you’re just stretched for cash or you’ve suffered a negative life event like a lost job or expensive divorce, a new auto loan that’s less expensive can help you get a fresh start financially, and provide you with a decent car to drive.

Cons of Auto Trade-Ins

Naturally, there are potential negatives, too:

  • You can’t expect a boatload of cash. Auto trade-in consumers should be realistic about the value they’ll get on a trade-in deal. Auto dealers usually don’t like to pay full price in the first place. Plus, the dealer has to ensure that the trade-in vehicle will pass inspection, detail the vehicle thoroughly, and get it ready for resale. Consequently, it’s a good idea to expect to get decent value for a car that’s in good condition, but don’t expect to win the lottery. One rule of thumb: Expect to get 10% to 15% lower than the vehicle’s estimated value on a trade-in—even for a car that’s in good shape and ready to sell.
  • There may be fees. Vehicle trade-in deals can come with hefty fees, including documentation fees, vehicle registration fee and sales tax, among other expenditures. In general, any fees that come with a new vehicle purchase should be added to your trade-in budget.
  • Potential scams. Not all auto dealers hold themselves to high ethical standards. In some situations, a dealer may try to “bait and switch” you into a different car that doesn’t meet your driving and financial needs. Or, the dealer may threaten to back out of accepting your trade-in vehicle if you don’t agree to strict terms on a new vehicle. Be patient, read all the contract paperwork the dealer is obligated to provide (or have a trusted attorney or auto financing expert do it for you), and be prepared to back out of a deal at the sign of any unagreed-upon financial risk. That may represent a hassle in the short term, but pulling back from a lousy deal can pay big dividends in the long run.

Which is Better For You – An Auto Refinancing Deal or A Trade-In?

Deciding between a refinancing opportunity or a trade-in really depends on the deal you’re getting, and whether or not that deal represents your best financial move and your best vehicle-ownership move. In general, getting a lower rate on a refinancing deal can save you hundreds and (depending on the rate and the loan) even thousands of dollars. If your car is reliable and meets your needs, this may make sense for you.

 

However, trading in a vehicle that’s too expensive to own and maintain for a lower-priced vehicle that’s still dependable on the open road can save you money and provide the safety you require when getting behind the wheel. Or if you really just can’t afford the amount of car you have anymore, then trading it in may be the right choice for you.

 

The ultimate decision is up to you, so use the information above to make your auto ownership experience the best one possible for now and for down the road.

The Takeaway

When you’re looking to lower your monthly car loan payments, you have choices. Whether you choose to trade in your current car for a new one or you decide to refinance your auto loan depends on your situation and preferences.

 

Learn more:

This article originally appeared on LanternCredit.com and was syndicated by MediaFeed.org.

 

The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

 

Lantern by SoFi:

This Lantern website is owned by SoFi Lending Corp., a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license number 6054612; NMLS number 1121636. (www.nmlsconsumeraccess.org)

All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion. There is no guarantee you will be approved or qualify for the advertised rates, fees, or terms presented. The actual terms you may receive depends on the things like benefits requested, your credit score, usage, history and other factors.

*Check your rate: To check the rates and terms you qualify for, Lantern conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender(s) you choose will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

All loan terms, including interest rate, and Annual Percentage Rate (APR), and monthly payments shown on this website are from lenders and are estimates based upon the limited information you provided and are for information purposes only. Estimated APR includes all applicable fees as required under the Truth in Lending Act. The actual loan terms you receive, including APR, will depend on the lender you select, their underwriting criteria, and your personal financial factors. The loan terms and rates presented are provided by the lenders and not by SoFi Lending Corp. or Lantern. Please review each lender’s Terms and Conditions for additional details.

Personal Loan:

SoFi Lending Corp. (“SoFi”) operates this Personal Loan product in cooperation with Even Financial Corp. (“Even”). If you submit a loan inquiry, SoFi will deliver your information to Even, and Even will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders/partners receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Even, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Even’s Licenses and DisclosuresTerms of Service, and Privacy Policy.

Student Loan Refinance:

SoFi Lending Corp. (“SoFi”) operates this Student Loan Refinance product in cooperation with Even Financial Corp. (“Even”). If you submit a loan inquiry, SoFi will deliver your information to Even, and Even will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lender’s receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Even, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Even’s Licenses and DisclosuresTerms of Service, and Privacy Policy.

Student loan refinance loans offered through Lantern are private loans and do not have the debt forgiveness or repayment options that the federal loan program offers, or that may become available, including Income Based Repayment or Income Contingent Repayment or Pay as you Earn (PAYE).

Notice: Recent legislative changes have suspended all federal student loan payments and waived interest charges on federally held loans until 01/31/22. Please carefully consider these changes before refinancing federally held loans, as in doing so you will no longer qualify for these changes or other future benefits applicable to federally held loans.

Auto Loan Refinance:

Automobile refinancing loan information presented on this Lantern website is from Caribou. Auto loan refinance information presented on this Lantern site is indicative and subject to you fulfilling the lender’s requirements, including: you must meet the lender’s credit standards, the loan amount must be at least $10,000, and the vehicle is no more than 10 years old with odometer reading of no more than 125,000 miles. Loan rates and terms as presented on this Lantern site are subject to change when you reach the lender and may depend on your creditworthiness. Additional terms and conditions may apply and all terms may vary by your state of residence.

Secured Lending Disclosure:

Terms, conditions, state restrictions, and minimum loan amounts apply. Before you apply for a secured loan, we encourage you to carefully consider whether this loan type is the right choice for you. If you can’t make your payments on a secured personal loan, you could end up losing the assets you provided for collateral. Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on the ability to meet underwriting requirements (including, but not limited to, a responsible credit history, sufficient income after monthly expenses, and availability of collateral) that will vary by lender.

Life Insurance:

Information about insurance is provided on Lantern by SoFi Life Insurance Agency, LLC. Click here to view our licenses.

More from MediaFeed:

How to shop for a car loan

 

Auto loan financing can make purchasing a new or used vehicle affordable. But to find the best financing options, it’s important to know how to shop for a car loan. Car loan shopping requires some preparation and an investment of time. But fortunately, it’s relatively easy to shop for car loans and even apply for auto loan financing online.

 

Here are some tips that can make finding a loan to buy your car easier.

 

Related: Smarter ways to get a car loan

 

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Before you get started shopping for auto loans, it’s important to know how much you can afford to pay for a vehicle. There are several things to factor into the equation, including:

  • Your target purchase price
  • How much you plan to offer as a down payment
  • Additional costs that may be due at signing, such as taxes, title fees, and dealer fees
  • Ongoing car insurance costs
  • Annual vehicle registration fees
  • Ongoing maintenance and repairs

If you have a vehicle you plan to trade in, you’ll also want to consider how that might affect the amount you’ll finance. The more trade-in value you can get for your current vehicle and the larger your down payment, the less you may have to finance.

 

DepositPhotos.com

 

If you apply for vehicle financing, potential lenders will check your credit report and scores as part of the approval process. Your credit scores can also influence the interest rate and annual percentage rate (APR) you’ll pay on an auto loan. That’s why that before you start shopping for a car loan, it’s important to understand how you might look to a potential lender based on your credit history.

 

Reviewing your credit reports and credit scores can provide you with some perspective on what kind of loan terms you’re likely to qualify for. You can get a free copy of your credit reports from each of the three credit bureaus (Equifax, Experian and TransUnion) through AnnualCreditReport.com. As you review your credit reports, look for the following:

  • Positive items, such as a solid payment history, that are helping your score
  • Negative items, such as payment delinquencies or maxed-out credit cards, that might be hurting your score
  • Errors or inaccuracies

If you spot any error or inaccuracy on your credit reports, you can dispute that information with the credit bureau that’s providing it. All three major credit bureaus allow you to file disputes online. Federal law requires them to investigate disputes and correct errors if they exist.

 

DepositPhotos.com

 

If your credit history is insufficient or you have a poor credit score because of past financial mistakes, getting a car loan could prove more difficult. In those scenarios, you might consider asking a cosigner to help you get approved for a loan. A cosigner can be a parent, a sibling, a friend or another creditworthy person who agrees to apply for auto financing with you. If you’re approved, you and your cosigner are treated equally in terms of responsibility for repaying the loan.

 

Asking someone to cosign has both pros and cons. On the pro side, a cosigner with an excellent credit score could help you get approved for vehicle financing at the best interest rates. The con, however, is that if you fail to repay the loan, you could ruin your credit and your cosigner’s, as well as your relationship. So it’s important to discuss the benefits and potential downsides with your prospective cosigner before asking for a commitment.

 

DepositPhotos.com

 

Once you’ve checked your credit and have an idea of what loan terms you’re likely to qualify for, the next step is to compare loans from different lenders.

 

You have several options for where to shop for auto loan financing:

  • Brick-and-mortar banks or credit unions
  • Online banks and credit unions
  • Online lenders that provide auto financing
  • Dealership financing

Your current bank may be the first place you shop for car loans. If you’ve been a good customer for years or you have multiple accounts, your bank might be willing to offer an interest rate discount or other special incentives for getting a car loan. But don’t limit your search for a car loan to just your bank.

 

Take some time to compare interest rates and loan terms from online banks and credit unions, as well as online lenders that offer vehicle loans. If you’re buying a vehicle from a dealer, you can also ask about the dealer’s in-house financing terms.

 

As you shop for a car loan, take note of the differences in what’s offered by different financing options. Specifically, pay attention to:

  • Interest rates
  • Annual percentage rates (APRs)
  • Loan repayment terms
  • Loan fees, including origination fees and/or prepayment penalties
  • Costs due at closing

Doing the math with an auto loan calculator can give you an idea of how much individual loans might cost you. It’s also helpful to check the reputation of any lender you’re considering as you shop for car loans.

 

Reading online reviews, checking the Consumer Financial Protection Bureau’s Complaint Database and looking at Better Business Bureau ratings can give you an idea of how trustworthy and consumer-friendly an auto lender may be.

 

DepositPhotos.com

 

Getting prequalified or preapproved for a car loan could be helpful when you’re narrowing down your financing options. Loan prequalification means that a potential lender has taken a look at your finances and is willing to lend you up to a certain amount of money.

 

Loan preapproval usually involves the added step of a hard credit check.  If you’re interested in prequalification or preapproval, be prepared to share some basic information with your potential lender, including:

  • Your income
  • Your Social Security number (if a credit check is required)
  • Details about the vehicle you want to buy, including purchase price, age, make and model
  • Proof of auto insurance or the ability to be insured

You may also be asked about what kind of loan terms you prefer and how much money you plan to put down. Having a prequalification or preapproval in hand when you’re car loan shopping can give you a better idea of how much you can afford to spend and how much financing you’re likely eligible for.

 

Bringing a prequalification or preapproval letter to a dealer can also show  that you’re serious about buying, which may make the dealer more willing to negotiate the purchase terms.

 

panida wijitpanya / iStock

 

As you shop for a car loan and choose your financing option, don’t neglect reading the fine print. It’s important to know exactly what your obligations are as a borrower and what your total borrowing costs add up to. When reviewing your auto loan documentation, be on the lookout for things like hidden fees or add-ons that you didn’t request.

 

If you spot anything in the loan contract that you don’t understand, don’t hesitate to ask the lender or financing company to explain it.

 

Also make sure you review the loan amortization schedule so you understand how much your loan will cost and how your payments will be applied over time. Your lender should provide this amortization schedule, which shows you how long it will take to pay off the loan and how much of each payment will be applied to interest, fees and the principal balance.

 

Depositphotos

 

Shopping around for the right car loan can take time. But it’s worth it to find the best option for your needs and budget. It’s also important if you want to get the best interest rates and loan terms available, based on your credit history.

 

When shopping for a car loan, you may want to consider whether a personal loan could be an appropriate choice for financing your vehicle. If you have a good credit score, it’s possible that you could qualify for an unsecured personal loan with a low fixed or variable APR. Whatever you choose, be sure to make your payments promptly in order to boost your credit rating and improve your chances of getting good loan rates on your next car.

 

Learn more:

This article originally appeared on LanternCredit.comand was syndicated by MediaFeed.org.

 

Lantern by SoFi:

This Lantern website is owned by SoFi Lending Corp., a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license number 6054612; NMLS number 1121636. (www.nmlsconsumeraccess.org)

 

All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion. There is no guarantee you will be approved or qualify for the advertised rates, fees, or terms presented. The actual terms you may receive depends on the things like benefits requested, your credit score, usage, history and other factors.

 

*Check your rate: To check the rates and terms you qualify for, Lantern conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender(s) you choose will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

 

All loan terms, including interest rate, and Annual Percentage Rate (APR), and monthly payments shown on this website are from lenders and are estimates based upon the limited information you provided and are for information purposes only. Estimated APR includes all applicable fees as required under the Truth in Lending Act. The actual loan terms you receive, including APR, will depend on the lender you select, their underwriting criteria, and your personal financial factors. The loan terms and rates presented are provided by the lenders and not by SoFi Lending Corp. or Lantern. Please review each lender’s Terms and Conditions for additional details.

 

Personal Loan:

SoFi Lending Corp. (“SoFi”) operates this Personal Loan product in cooperation with Even Financial Corp. (“Even”). If you submit a loan inquiry, SoFi will deliver your information to Even, and Even will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. 

 

The lenders/partners receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website.

 

 More information about Even, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Even’s Licenses and DisclosuresTerms of Service, and Privacy Policy.

 

Student Loan Refinance:

SoFi Lending Corp. (“SoFi”) operates this Student Loan Refinance product in cooperation with Even Financial Corp. (“Even”). If you submit a loan inquiry, SoFi will deliver your information to Even, and Even will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lender’s receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. 

 

More information about Even, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Even’s Licenses and DisclosuresTerms of Service, and Privacy Policy.

 

Student loan refinance loans offered through Lantern are private loans and do not have the debt forgiveness or repayment options that the federal loan program offers, or that may become available, including Income Based Repayment or Income Contingent 

Repayment or Pay as you Earn (PAYE).

 

Notice: Recent legislative changes have suspended all federal student loan payments and waived interest charges on federally held loans until 09/30/21. Please carefully consider these changes before refinancing federally held loans, as in doing so you will no longer qualify for these changes or other future benefits applicable to federally held loans.

 

Auto Loan Refinance:

Automobile refinancing loan information presented on this Lantern website is from MotoRefi. Auto loan refinance information presented on this Lantern site is indicative and subject to you fulfilling the lender’s requirements, including: you must meet the lender’s credit standards, the loan amount must be at least $10,000, and the vehicle is no more than 10 years old with odometer reading of no more than 125,000 miles. Loan rates and terms as presented on this Lantern site are subject to change when you reach the lender and may depend on your creditworthiness. Additional terms and conditions may apply and all terms may vary by your state of residence.

 

Secured Lending Disclosure:

Terms, conditions, state restrictions, and minimum loan amounts apply. Before you apply for a secured loan, we encourage you to carefully consider whether this loan type is the right choice for you. If you can’t make your payments on a secured personal loan, you could end up losing the assets you provided for collateral. Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on the ability to meet underwriting requirements (including, but not limited to, a responsible credit history, sufficient income after monthly expenses, and availability of collateral) that will vary by lender.

 

Life Insurance:

 

Information about insurance is provided on Lantern by SoFi Life Insurance Agency, LLC. 

 

Lantern by SoFi September $10 Check Your Rate Promotion (“Promotion”):

 

The Promotion is offered by Lantern by SoFi Lending Corp. (“SoFi”). SoFi reserves the right to change or terminate this Promotion at any time with or without notice to you. No purchase necessary to participate. Additional terms and conditions may apply.

 

Promotion is void where prohibited by state law. Auto loan refinance not available in some states, including ME, MD, NE, ND, NV, NY, PA, VT, and WI.

 

Eligible Participants: The Promotion is open to anyone who resides within the United States** and is of the age of majority in the state in which they reside. To receive a $10 bonus in the form of a gift card through the Promotion you must agree to a soft credit pull on lanterncredit.com to check your rate for the following Lantern by SoFi Lending Corp. (“Lantern” or “Lantern Marketplace”) product: Auto Loan Refinance. Checking your rate will not affect your credit score. If you later decide to submit an application and agree to a hard credit pull your credit score may be impacted. 

 

Participants will receive the $10 bonus gift card regardless of whether or not they are pre-qualified for a product through the Lantern Marketplace. Those who have already received a bonus for checking their rate on lanterncredit.com for a personal loan or auto loan refinance in the 2021 calendar year are not eligible for this promotion. SoFi employees are not eligible to participate in this Promotion. Notwithstanding the above, SoFi reserves the right to exclude any consumer from participating in the Promotion for any reason, including suspected fraud, misuse, or if suspicious activities are observed.

 

Promotion Period: The Promotion is available beginning on 12:00 AM Eastern Time on September 1st, 2021 and ending 11:59 PM Eastern Time on September 14, 2021. Participants are limited to one (1) bonus between the Personal Loan or the Auto Loan Refinance product per calendar year and two (2) per household.

 

Payout: All payouts are fulfilled by SoFi’s vendor Customer Motivators. Eligible participants will receive an email from Customer Motivators with a unique code and a link to a web page to redeem for a $10 bonus gift card.

 

Tax Consequences: Bonus amounts of $600 or greater in a single calendar year may be reported to the Internal Revenue Service (IRS) as miscellaneous income to the recipient on Form 1099-MISC in the year received as required by applicable law. Recipient is responsible for any applicable federal, state or local taxes associated with receiving the bonus offer; consult your tax advisor to determine applicable tax consequences.

 

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Featured Image Credit: Photobuay / iStock.

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Brian O'Connell

Brian O'Connell is a freelance writer and contributor at Experian.com.