Q&A

Accredited investors can invest in Promissory Notes for durations of one to five years.  Each note provides a fixed interest rate with interest calculated daily and payments of interest only paid to the investor monthly.  Investors have the flexibility to take the interest income or reinvest and compound it.  

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.

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 and 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), individual income exceeding $200,000, or 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. The information above outlines the accreditation requirements for an individual; there are several other ways to be considered accredited. Yrefy follows the SEC guidelines for investor accreditation, you can learn more about this requirement by clicking here.

Only U.S. citizens with a Social Security Number (SSN) and U.S. Entities with a valid Tax Identification Number 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.

Yrefy is in the business of helping Borrowers and Co-Borrowers with their distressed and delinquent Private Student Loans get out of debt quickly.  We do this by carefully underwriting the Borrower and Co-Borrower while working with the existing loan holder to negotiate, settle, and pay off the existing loan at a discounted rate, typically around 35%-40% of the loan balance.  We then refinance the loan to the Borrower, offering a low fixed interest rate and a custom term built around their ability to pay.  We then share some of the spread with our investors, not to the detriment of the Borrower.  It’s a true Win-Win-Win scenario.

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 investors the flexibility to choose whether to receive monthly interest payments or have them reinvested in their accounts. The interest is compounded daily and paid monthly, allowing investors to receive regular income or increase their returns over time.

We offer flexibility in how you receive your interest. 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 must withdraw more than the monthly interest payment. Yrefy does offer a liquidity feature if you need your investment back before the elected maturity.  How it works: You submit your early redemption request, and Yrefy has 90 days to process and pay it out.  There are no fees to process an early redemption, and there is no attack on the initial investment amount.  The penalty for premature redemptions is a recapture of only a percentage of the interest, whether paid or compounded.  The investor is given credit for the amount of time they were invested as a percentage of the total time that was agreed to.  Interest is calculated only up to the date of redemption.  For example, if the investment was in the one-year note (12 months) and the investor needed their funds back at 6 months (50% of the agreed-upon investment duration), then the investor would keep 50% of the interest calculated to that point in time.  If the investor were to stay in for 80% of the agreed-upon time, they would keep 80% of the interest to that point in time, and so on.    Please see the Private Placement Memorandum for a full description of the liquidity feature.   

For Non-Qualified account types (Individual, Joint, Trust, or other entity types,) Interest received or compounded is treated as ordinary income. You will receive a 1099-INT form by January 31st of the following tax year.  For Qualified Account Types (IRAs), Yrefy does not report any taxes to the IRA custodian.  Please visit with your CPA or other tax specialist for any advice regarding taxes; Yrefy does not give tax advice.

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 account beneficiary. As the beneficiary, you can direct those funds and choose from various investments, including our offering. While a bit more paperwork may be 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 can 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 at maturity you elect to invest for another year, you can “roll-up” to the two-year note, which accomplishes two goals.  First, you lock in your first-year interest as the investment has matured; the interest is now considered part of the principal.  Second, when you “roll-up” to the two-year note, you will receive the interest rate on the two-year investment for one additional year.  You are only committing to one more year of investment but will receive the two-year rate.  If you had to liquidate your investment before the end of the roll-up duration, in this example, we would calculate the surrender penalty based on a one-year time frame, not a two year time frame.  You can repeat this process at the maturity of each term, extending it further while securing the gains accumulated and getting the higher interest rate of the term you chose to continue with.  Please review the Private Placement Memorandum for more information on the roll-up feature.

While we cannot guarantee investment returns, we proudly say we have never missed an investor payment (interest or return of principal).  Investments are held in a separate entity, where the only asset is the portfolio of refinanced Private Student Loans and the only liability is to the investors.  Through a security agreement, the portfolio of refinanced Private Student loans is the collateral for the benefit of the investors.  In the event of an uncured default by Yrefy SLP4, LLC, the managers must appoint a third party to facilitate the liquidation of the portfolio to pay back the investors. 

Additionally, the interest rates offered are fixed interest rates; 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.  Interest rate increases are not retroactive to the start date of the investment.

 It is important to note that all investments carry some level of risk.

Beyond the early redemption of an investment (see the Private Placement Memorandum for a full explanation of the liquidity feature and costs associated), Yrefy charges no fees or expenses for an investment in Yrefy. 

 Please note that if you choose to invest through a self-directed IRA, use a third-party custodian, or use a financial advisor, CPA, lawyer, or other advisor in connection with your investment, you may encounter fees or other expenses.  It is the investor’s responsibility to ask and understand these fees and expenses as they are not associated with Yrefy.

In the Yrefy Private Placement Memorandum or “PPM,” there is a copy of a legal document called a “Security Agreement,” which we welcome and encourage you to read.

The Collateral Agent may sell the portfolio, collect on it, or sell a portion and collect on the balance, depending on 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 discover Yrefy through online advertising, such as Google Pay per Click.  Yrefy was fortunate enough to forge a relationship with Ramsey Solutions and has now received an endorsement from Dave Ramsey for our Borrower solution.

In addition to documents provided by the Borrower and Co-Borrower, Yrefy pulls data from credit reporting agencies (TransUnion, Experian, and Equifax) to assess the Borrower’s financial situation; we do not underwrite based on FICO score.

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.

Because Yrefy specializes in refinancing distressed Private Student Loans, Borrowers are delinquent on their payments, which tends to lower FICO scores; however, because there are many variables considered in a credit report, some Borrowers may have higher FICO scores.  Yrefy does not underwrite loans based on FICO scores, so a higher or lower score will not affect an underwriting decision.

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.

Federal Student Loan Forgiveness programs will not directly affect Yrefy's business since Yrefy exclusively focuses on refinancing distressed Private Student Loans and does not deal with Federal Student Loans. Additionally, most Borrowers who have Private Student Loans also have Federal Student Loans, so if there were any forgiveness of Federal Student Loans, hypothetically, it would free up cash flow for a Borrower with a Private Loan, making them a stronger Borrower for Yrefy.

No, Yrefy does not participate in any Federal Student Loan Forgiveness programs.

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.

Our Mission is to provide relief to Borrowers and Co-Borrowers burdened by Defaulted Private Student Loans while offering a unique investment opportunity to Accredited Investors who believe in and support our vision.