Q&A

Yrefy specializes in refinancing distressed Private Student Loans. We provide investment opportunities for individuals or entities interested in supporting the refinancing process and helping Borrowers improve their financial situation

A Private Placement Reg D 506(c) offering is a type of securities offering that allows private companies to raise capital from accredited investors and is filed with the securities with the U.S. Securities and Exchange Commission (SEC). It falls under Regulation D (Reg D) of the Securities Act of 1933. The "c" in 506(c) refers to the specific rule under Regulation D that permits companies to use general solicitation and advertising to attract investors.

A promissory note is a legally binding written agreement between two parties, commonly known as the borrower and the lender. In this document, the borrower promises to repay a specific amount of money, along with any applicable interest, to the lender within a defined period. It serves as a formal acknowledgment of debt and outlines the terms and conditions of the loan, including the repayment schedule, interest rate, and any additional fees or penalties.

Accredited investors are individuals who meet one of the following criteria: a net worth over $1 million (excluding their primary residence) or an individual income exceeding $200,000, or a household income exceeding $300,000 for each of the previous two years, with a reasonable expectation of maintaining the same income level for the current year. If you are interested, kindly contact us to be added to our 'contact me' list and receive updates on the offering date.

Only U.S. citizens with a Social Security number (SSN) can invest in Yrefy.

The minimum investment amount required is $50,000.

Yes, you can add additional funds with a minimum of $25,000. These new additions will be held in the same account but will have a different starting date from the initial investment. You have the flexibility to choose a different term for these additional funds.

The 10.25% return we offer is made possible through our unique investment strategy. We negotiate with lenders to refinance distressed student loans at a discounted rate, typically around 35% to 40% of the loan balance. By acquiring these loans at a lower cost and charging borrowers an average fixed interest rate of 3.9%, which creates a spread of 60% to 65%, that allows us to generate attractive returns for our investors.

Interest payments are paid out by the 15th of the following month. Our system allows the Investor to set up as many ACH accounts as they would like us to deposit interest payments to, and the Investor can choose in 1% increments or dollar amounts they want us to deposit into each account.

We offer the flexibility for investors to choose whether they want to receive monthly interest payments or have them reinvested in their account. The interest is compounded daily and paid out monthly, providing the option for investors to either receive regular income or let their returns grow over time.

We offer flexibility in how you receive your returns. You can choose to receive monthly interest payments, providing you with a consistent income stream. Alternatively, if you prefer to see your returns grow over time, you can choose to have your interest compounded. It's entirely up to you, and you can change your preferences monthly.

We understand that circumstances may arise where you might need to withdraw more than the monthly interest payment. In such cases, you can access additional funds from your investment. However, the investment offers liquidity with redemption requests processed and paid out within 90 days of the request date, whether for partial or full redemption. Comparable to a Certificate of Deposit (CD), early redemptions or surrenders incur a surrender penalty. This penalty, proportionate to the interest accrued during the investment holding period, applies solely to the redeemed amount, leaving the principal untouched.

Interest received or compounded is treated as ordinary income. You will receive a 1099-INT form by January 31st of the following tax year.

We work with several self-directed IRA custodians who can hold this investment on your behalf. These custodians handle all the tax reporting for the account. When the account is set up, they become the account owner, and you, as the investor, become the beneficiary of the account. As the beneficiary, you have the freedom to direct those funds and choose from various types of investments, including our offering. While there may be a bit more paperwork involved, we are here to assist you throughout the process to ensure a smooth experience.

There are no restrictions on what you can do with your investment at the end of the term. Once the term is complete, you have the freedom to reinvest the funds, withdraw them, or explore other investment opportunities according to your financial goals and preferences.

We also offer a roll-up provision, which allows you to extend the investment term beyond the initial period. For example, if you invest in a one-year note and decide to keep it after the year, you can roll it into a two-year note, locking in the interest rate earned during the first year. This way, you can continue benefiting from the higher interest rate. You can repeat this process at the maturity of each term, extending it further while securing the gains accumulated along with getting the higher interest rate of the term you chose to continue with.

While we cannot provide a guarantee on investment returns, our investment strategy is designed to provide stable and attractive returns. We have a strong underwriting process in place, carefully assessing the borrowers' ability to make monthly payments. Additionally, our security agreement and third-party custodian ensure that investor interests are protected. It's important to note that all investments carry some level of risk, but we strive to minimize risks and maximize returns for our investors. Furthermore, I want to mention that the Company cannot reduce interest rates unless a penalty-free right to rescind is offered to investors. If the Company elects to increase interest rates, existing investors will receive the interest rate increase on the declared effective date of the increase; increases are not retroactive to the start date of the investment.

There are no additional fees or expenses associated with investing in Yrefy. We offer a fixed interest rate, and there are no hidden charges or transaction fees. However, please note that if you choose to invest through a self-directed IRA, you may encounter additional expenses from the custodian of your IRA account.

In the Yrefy Private Placement Memorandum or “PPM,” there is a lengthy legal document called a “Security Agreement,” we welcome and encourage you to read it. Still, for the purposes of this conversation, I will paraphrase it. If Yrefy defaults on any investor payment, be it Principal or Interest, the entire portfolio is handed off to an independent third-party “Collateral Agent.” The Collateral Agent has one job, to make the investors as whole as possible.

In case of a default, an independent third-party "Collateral Agent" (UMB Bank) takes over the entire portfolio to make the investors as whole as possible.

The Collateral Agent may sell the portfolio, collect on it, or sell a portion and collect on the balance, depending on what is in the investor's best interest.

Yrefy specializes in refinancing distressed Private Student Loans and does not refinance any Federal Student Loans.

People opt for private student loans for various reasons. Unlike federal loans, private loans have more lenient credit requirements, making them accessible to those who may not qualify for federal aid. Additionally, some students may exhaust their federal loan limits and turn to private loans to cover remaining educational expenses. Private loans may also offer different interest rates and repayment terms that some borrowers find more suitable for their financial situation.

No, unlike consumer debt, both Federal and Private Student Loans are Bankruptcy protected, and borrowers cannot simply bankrupt out of them.

Yrefy individually underwrites each Borrower through a thorough and lengthy underwriting process, similar to someone applying for a mortgage.

Borrowers find Yrefy through various channels, including referrals from over 125 Lenders, Servicers, Collection Agencies, and Law firms. They also discovered Yrefy through online advertising such as Google Pay per Click.

Yrefy pulls data from credit reporting agencies (TransUnion, Experian, and Equifax) to assess the Borrower's financial situation.

Approximately 70% of Borrowers have a Co-Borrower, usually a family member, who has co-signed on the existing loan.

Yrefy uses the credit report to calculate the Borrower's debt-to-income ratio and to determine their total student loan debt, both Private and Federal.

No, Yrefy does not underwrite loans based on FICO scores and believes that these scores often miss the mark for their Borrowers.

Yrefy focuses on the Borrower's ability to comfortably afford their payment and verifies their willingness to repay by setting up an escrow account before funding the loan.

On average, the underwriting process at Yrefy lasts about six and a half months, during which the Borrower is making monthly escrow payments.

Yrefy's lender relations team maintains relationships with various agencies and assists Borrowers in resolving their student loan problems.

Yrefy's average Borrower experiences a significant increase in their FICO score, jumping up an average of 125 points within 6-9 months after Yrefy funds their loan.

Yrefy specializes in refinancing distressed Private Student Loans, so it mainly serves Borrowers with low FICO scores.

Yrefy's underwriting process focuses on the individual financial situation of each Borrower rather than relying solely on FICO scores.

Yrefy requires this to ensure that the Borrower is willing and able to pay back the loan before funding it.

Yrefy boasts a default rate of less than 1%, which is considerably low for the industry.

The Federal Student Loan Forgiveness program will not directly affect Yrefy's business since they exclusively focus on refinancing distressed Private Student Loans and do not deal with Federal Student Loans.

No, Yrefy does not participate in any Federal Student Loan Forgiveness programs as they are solely dedicated to refinancing private student loans.

No, Yrefy's refinancing services are exclusively available for borrowers with distressed Private Student Loans; they do not offer refinancing for any Federal Student Loans.

Yrefy mitigates the impact of the Federal Student Loan Forgiveness program by not including any Federal Student Loans in their portfolio, focusing solely on distressed private loans.

Yrefy's primary goal is to resolve the student loan problems of distressed Borrowers and help them achieve a responsible and positive financial future.