#1 Student Loan Lawyer
Updated on December 31, 2022
Yrefy is a lender that helps borrowers refinance private student loans that have defaulted or been charged off — even if they have bad credit.
Yrefy was founded with a radical idea — refinance defaulted private student loans. This strategy is unthinkable to most companies. The traditional way of doing things is to make loans to credit-worthy borrowers, i.e., those with strong finances, steady payment history, good credit scores, and so on. But what about those who slipped up, missed a few monthly payments, but are now in a position to recover from default and pay back their debt?
That’s where Yrefy comes in.
They’re the only lender I’ve found willing to help borrowers return their accounts to good standing after defaulting on private student loans.
And best of all, Yrefy offers fair loan terms — even for those with bad credit. Its fixed rates range from 1-7%, which feels like a scam, but it’s totally legit.
The downside is that, unlike most private lenders, Yrefy charges an origination fee. But that is a small price to get out of default and finally have a manageable monthly payment that doesn’t leave you wondering how you’ll pay student loans and rent.
Keep reading to learn more about Yrefy.
Interest rate: 1-7% fixed interest rate APR
Average refinance amount: $41,000 per borrower
Pros of Yrefy:
No minimum credit score
Refinance defaulted loans
1 skipped payment is allowed every 6 months
Cons of Yrefy:
5% origination fee increases the price of refinancing
No variable interest rate is available
Not available in all US states
How does Yrefy work?
Yrefy gives people struggling with private loans the chance to escape delinquency and default by refinancing their subprime or prime debt into a new loan that often has a lower interest rate and longer repayment term.
Though most lenders avoid lending to borrowers with distressed private student loans, Yrefy wants to work with those who want to pay but can’t because they lost a job, got divorced, had a child, or other situations beyond their control. The company’s goal is to provide refinancing options to these borrowers so they can continue making their payments and eventually pay off their loans.
Related: How to Refinance Student Loans
Yrefy might be the best option for your situation if you have defaulted private student loans and…
your credit score is below 650.
you didn’t finish college.
you don’t make a lot of money.
you don’t want to fill out a lengthy online application before talking to an actual human.
This company is not suitable for you if you need to refinance non-defaulted private or federal loans.
If you’ve fallen behind on payments and can manage a lump sum payment, consider negotiating a private student loan settlement instead of refinancing.
Learn More: Can You Negotiate a Student Loan Payoff
Yrefy refinances delinquent or defaulted private student loans but not federal student loans. If you’re struggling with those, consider an income-driven repayment plan, forbearance, or deferment. These options will lower or temporarily stop paying your loans without entering default. You can also work with the government to rehabilitate your loans if they’re already in default.
To refinance with Yrefy, you must meet the following requirements:
Type of student loan: Defaulted or delinquent private loans only. Borrowers may have federal student loans, but those loans aren’t eligible for refinancing with Yrefy.
Refinance loan amount: $5,000-$250,000.
Income requirement: You must have a regular, steady income.
Credit score requirement: None, but Yrefy does check applicants’ credit reports to review payment history, open accounts, and so on.
Cosigner/Co-borrower requirement: None.
Graduation requirement: None.
Location requirement: Available in 37 states (AK, AL, AR, AZ, CT, DE, FL, GA, HI, ID, IL, IN, KS, LA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, OH, OR, PA, RI, SC, TN, TX, UT, VA, WI, WV, and WY).
Learn More: How Do I Know if My Student Loan Is in Default?
Student loan refinance interest rates & terms
Refinance loan rate: 1-7% fixed rate. Yrefy doesn’t offer variable-rate loans.
Average rate: 3.9%.
Repayment term: 3-10 years for most borrowers, but at its discretion, Yrefy allows some borrowers to pay their loans back over 15 years. A longer-term may lead to a higher interest rate.
Application fee: None.
Origination fee: 5% of the outstanding loan balance.
Prepayment penalty: None.
Yrefy offers 2 programs to help borrowers who are struggling with payments:
The SKIP-12 program allows you to skip up to 12 payments — once every 6 months — during the life of the refinance loan.
The other (unnamed) program allows you to re-refinance your refinance loan, stretch out the life of the loan, and even lower your monthly payments.
Yrefy does not offer a conventional forbearance program for borrowers to pause student loan payments due to various circumstances.
People who refinance with Yrefy typically see a boost in their credit score. This could help qualify for other loans that would have otherwise been denied.
In addition to handling its own underwriting, Yrefy acts as its own loan servicer. You won’t have to deal with a third-party service provider, eliminating miscommunication between the loan issuer and the servicer.
Related: Sallie Mae Loan Forgiveness
Applying for a Yrefy loan
To apply for a Yrefy loan, you must fill out the contact form on their website. You won’t be able to complete an application online — a representative will reach out to you.
There is no application fee to apply for a Yrefy loan. Prequalification requires a soft credit check that will not affect your credit score.
Instead of focusing solely on your score, Yrefy considers many factors, including your bank account balance and the total amount of your student loan debt.
The average time from approval to defaulted loan payoff is 30-45 days. After that, you can start paying off your new non-default refinance loan with Yrefy.
Customer reviews for Yrefy are limited but promising.
Better Business Bureau: Yrefy has an A rating with the BBB.
CFPB: Yrefy doesn’t have any complaints listed with the Consumer Financial Protection Bureau over the past three years.
Litigation: Unlike other financial institutions, Yrefy does not appear to be facing any pending litigation for poor servicing or making predatory student loans.
How to contact Yrefy
When you’re ready to get in touch with Yrefy, visit their website to use the contact form.
You can also call Yrefy (888-819-9556) to speak with a customer service representative, Monday-Friday, 7:00 AM-5:00 PM MST.
Your source for defaulted student loan support
Sign up for my free email newsletter for more student loan information and handy tips for clever repayment or private student loan forgiveness. I’m Tate, a student loan attorney with years of experience.
Schedule a call with me if you want to ask specific questions about your student loans.
UP NEXT: Strategic Default for Student Loan Debt? Read This First