Is Yrefy Legit? What Regulators Found About the 10.25% Investment

Yes, Yrefy is a real company. It has been lending since 2017, it holds a Better Business Bureau accreditation, and it does what it says it does: it buys distressed private student loans and refinances them for borrowers other lenders won’t touch.

That is usually not the question people are asking. Most people searching this company have seen an advertisement offering a fixed return of up to 10.25% and want to know whether to put money into it. That is a different question with a different answer, and in February 2025 a state securities regulator put part of that answer on the public record.

Yrefy runs two separate businesses through two separate companies: an Arizona lender that refinances defaulted and delinquent private student loans, and a Delaware subsidiary that sells promissory notes to investors.

Yrefy, LLC is the lender. It is the business the Better Business Bureau rating and the celebrity endorsements attach to, and it is the one people are describing when they say Yrefy helped them.

Yrefy SLP4, LLC is the issuer. Wholly owned by Yrefy and formed at the end of 2019, SLP4 does not lend to anyone. It sells notes to investors and uses the proceeds to fund the portfolio of refinanced loans.

Confirming that Yrefy is a legitimate, operating lender says something true about the first business. It says nothing about the second. Reviews, ratings, and endorsements that describe the refinancing operation are not evidence about the investment, and the two are routinely treated as if they were.

You own a promissory note issued by SLP4. You do not own the student loans, and you are not the lender to any individual borrower. You are a creditor of SLP4, and the loan portfolio serves as collateral behind that obligation.

The offering is limited to accredited investors. That generally means a net worth above $1 million excluding your home, or income above $200,000 individually, and the issuer is required to take reasonable steps to verify it.

The minimum investment is $50,000.

There are five terms, running from 12 to 60 months, each carrying its own fixed rate. As set out in the regulator’s order, those rates run 6.50%, 7.00%, 7.75%, 8.50% and 10.25%.

The 10.25% figure belongs to the five-year term only. A one-year commitment pays substantially less, and the way that number was advertised is part of what a regulator took issue with.

The notes are not insured. There is no FDIC or SIPC coverage, because this is not a bank deposit or a brokerage account. The offering materials themselves state that the investment carries the risk of total loss.

They are also not registered. The notes are sold under an exemption from registration — Regulation D, Rule 506(c) — which allows a company to advertise a private offering publicly, but relieves it of the disclosure obligations that come with a registered security. Less required disclosure is the trade the exemption makes.

Most of the return is generated by the price Yrefy pays for the loans, not by the rate its borrowers are charged.

Yrefy’s borrowers pay low fixed rates. If the money coming in from borrowers is priced in the single digits, a double-digit payout to investors looks like it should not close. It closes on the purchase price.

Yrefy buys distressed private student loans for something in the range of 35% to 40% of the balance owed. The borrower then repays a refinanced loan built around what they can actually afford. The gap between what Yrefy paid for the debt and what the borrower ultimately repays is where most of the margin lives. A 5% origination fee added to the borrower’s balance and ongoing servicing income contribute as well.

That purchase price is favorable. Distressed private student loan debt does not have one market rate — what a holder will accept varies considerably by lender, and a good deal of this paper changes hands well above 40%, in some cases in the 60% range. Buying consistently at the lower end of that spread is an economic advantage, and it explains arithmetic the interest rates alone do not.

Disclosure: Tate Esq, LLC has an affiliate relationship with Yrefy covering its refinancing service for borrowers with distressed private student loans. That relationship does not extend to the investment offering discussed on this page, and no compensation is received in connection with it.

The model depends on repayment. The return to investors is funded by borrowers making payments on loans they previously stopped paying. Yrefy has publicly cited a default rate under 2%. That figure is a company statement, and because the offering is exempt from registration, there is no audited public filing an outside investor can check it against.

Re-default may well run lower than instinct suggests. Borrowers in this population usually did not stop paying because they had no capacity to pay anything. They stopped because the rate and the terms the original lender set were beyond them. Repricing the debt to something affordable addresses the cause in a way a collection call does not. That supports the plausibility of a low re-default rate. It is not verification.

On February 3, 2025, the Massachusetts Securities Division concluded that Yrefy and Yrefy SLP4 violated the state’s securities act by failing to tell investors that the people endorsing the investment were paid to do so, and by making misleading statements in offering and marketing materials.

Yrefy paid a $750,000 administrative fine, was censured, and was permanently ordered to stop the conduct. It cannot deduct the fine on its taxes or recover it through insurance.

Every Massachusetts investor was offered their money back. The company had to send a written rescission offer by both email and certified mail to all Massachusetts holders, refunding the full principal with no reduction for interest already earned. Eight Massachusetts residents held roughly $1.4 million in these notes at the time.

There was a script. The chief executive and chief investment officer wrote a one-minute script for the people promoting the investment. It described the business, the returns and the principal-protection features, and it included direction on delivery — down to when to smile. The order found promoters followed it essentially word for word.

At least nineteen media personalities were paid to read it. One received at least $40,000 a month plus start-up costs for a social media show, totaling more than $726,500. Another was paid at least $184,750. None of the advertising disclosed that any of them were compensated.

The advertising spend was substantial. Yrefy paid at least $348,600 to two Massachusetts radio stations and more than $5.4 million to run one-minute commercials nationally. One network proposal targeted an audience aged 55 and over, running midday on weekdays.

The script also left out a word. It presented 10.25% as the return, when the actual rate depended on which term the investor chose and 10.25% applied only to the longest one.

Yrefy admitted these facts. Regulatory settlements frequently resolve without any admission, and much of the coverage of this order treats all of it as unproven allegation. On these points, it is not.

In two places, the advertising described terms more favorable than the offering documents provided: what happens to principal on an early withdrawal, and who controls the collateral if the company defaults. Yrefy neither admitted nor denied this portion of the order.

Early withdrawal. The script told listeners there would be no attack on their principal if they needed their money back. The private placement memorandum provided that an investor requesting early withdrawal would receive their principal less any interest income already paid or compounded.

The collateral agent. Yrefy’s website described an independent third party that would step in and manage the loan portfolio if the company defaulted, whose sole job was to make investors as whole as possible. The private placement memorandum named an outside bank only as a backup, with Yrefy itself acting as collateral agent beforehand. The security agreement actually distributed to Massachusetts investors provided that Yrefy would serve as collateral agent in the event of default — an interested party rather than an independent one.

The order also records that once the investigation began, Yrefy moved quickly: it removed the paid endorsements from its website and commissioned a review of its advertising, marketing and offering materials.

The order expressly provides that it is not intended to disqualify Yrefy from continuing to sell unregistered securities — a consequence that a securities fraud finding can otherwise carry.

Under the “bad actor” provisions of Regulation D, a finding of this kind can bar a company from using the very exemption that lets it sell unregistered notes to investors. That did not happen here. The exemption survived, Yrefy has continued to file the required federal notices for the offering into 2026, and the notes remain available at the same range of rates.

That is not a hidden concession — the language sits in the order’s own terms, and negotiated resolutions commonly address collateral consequences this way. The practical effect is that the offering that drew the order is still the offering being advertised.

A meaningful share of this kind of investment is funded with retirement money. Because a private placement cannot sit in an ordinary brokerage IRA, investors route it through a self-directed IRA held by a third-party custodian, and Yrefy’s materials describe working with several such custodians.

That structure changes the risk conversation. The custodian holds the asset but does not evaluate it, and self-directed IRA custodians generally do not verify the quality or the existence of what they hold. Securities regulators have issued standing warnings about the fraud risk this creates — not about any particular sponsor, but about the structure itself, precisely because investors read custody as a form of vetting. There are also custodial fees that sit outside anything the sponsor charges.

Six questions determine most of what an investor can know about this offering, and each is answerable from documents rather than from advertising. None of this is a recommendation in either direction.

Which term does the quoted rate belong to? Each of the five terms pays a different rate, and the figure being quoted may not correspond to the term under consideration.

What happens if the money is needed early? The governing language sits in the private placement memorandum, and it addresses principal and interest already paid or compounded separately.

Who controls the collateral if the sponsor fails? The answer can differ before and after a default, and the security agreement presented for signature governs rather than a website description.

How is the default rate measured? A default rate depends on what counts as a default, over what period, across how large a portfolio, and whether any outside party verifies the figure.

What have regulators said? Securities enforcement actions are public records, and the underlying order says more than a summary of it does.

What happens to the position if the collateral underperforms? Recovery depends on where a noteholder stands relative to other creditors.