Yes. The arrangement is called a split-payment partial: a buyer purchases a fixed dollar share of each payment for a set period, and the rest keeps reaching you every month. The share can be half or any other amount the two of you agree.
How selling part of each payment works
In a straight partial you sell whole payments, the next 60 for example, and your income from the note stops while the buyer collects them and starts again when the note comes back.
A split cuts across each payment instead of along the calendar. The payer sends the same amount as before. A servicing company, which is a firm that collects payments and keeps the record for both sides, divides it and forwards the buyer’s share to the buyer and yours to you. For the payer the only change is where the payment is sent, since the rate, the amount and the payoff date stay as written.
Who a split suits
The clearest case is a note holder who relies on the monthly check. If the note pays part of your living costs, several years with no income from it may not be workable, and a split keeps a payment arriving throughout. It can also fit when the sum you need is modest and handing over full payments would raise more than you want. A further reason is visibility: with part of every payment landing in your account, you see each month whether the payer has paid.
What half looks like in numbers
Our example note pays $1,140 a month and has 168 payments left, so half of each payment is $570. At the 8% buyer yield used for the other examples on this site, half a payment is worth half as much as a whole one.
| Cash today | Monthly income during the deal | What you have afterwards | |
|---|---|---|---|
| Sell 60 whole payments | $56,200 | $0 | 108 payments of $1,140 |
| Sell half of 60 payments | $28,100 | $570 | 108 payments of $1,140 |
| Sell half of all 168 payments | $57,500 | $570 | Nothing further |
Illustrative example. The split figures are half of the whole-payment prices at the same 8% yield. A real buyer may price a split at a different yield, so read these as a guide to the shape of the deal.
Compare the first and third rows, which raise almost the same cash. The first gives up all of your income for five years and then returns the whole note. The third keeps $570 a month coming for 14 years and leaves nothing to come back at the end.
What a split asks of you
A split has more moving parts than a straight partial. Someone neutral has to divide each payment and record it. In practice that is the company servicing the note during the partial, and servicing carries a monthly cost that the agreement should assign to one side or the other.
It is also a longer relationship and more paperwork for a smaller purchase. Some buyers will not do one for that reason, and others price a split at a higher yield than a straight partial, which lowers what you receive.
Then there is the short payment. If the payer sends less than the full amount one month, the agreement has to say whose share is filled first, and a buyer is likely to ask that theirs is. Read that clause together with the early payoff and default terms, because a payer who stops altogether stops your share as well as the buyer’s.
Choosing between a split and a straight partial
Write down the cash you need now and the monthly income you cannot do without. If you can live without the payment for a few years, a straight partial raises the cash with less paperwork and no monthly division to administer. If you cannot, look at a split sized so that the share you keep covers what you need each month, and check what you still receive during each kind of partial before you settle on a figure.
Then ask for both to be priced side by side, with the yield shown on each. When you send us your note for pricing, include the monthly amount you want to keep, so that any buyer willing to quote a split has a figure to build it around.
Half is only the easiest share to picture. A split-payment partial can be written for any fixed dollar amount, so settle the monthly figure you need first and let the share follow from it. Of the ways a partial purchase can be built, it is the one that keeps money arriving every month.
Related questions
Does the share I sell have to be exactly half?
No. The buyer purchases a fixed dollar amount from each payment, and you choose the amount with them. A sensible starting point is the monthly income you need to keep.
Does my payer have to send two separate payments?
No. The payer sends one payment as usual. A servicing company divides it and forwards each share.
What happens to my share if the payer pays late?
Your share is late too. If the payer sends less than the full amount, the agreement decides whose share is filled first, so read that term before you sign.