Virgin Money is a unique social lending program which allows family and friends the opportunity to fund personal loans. Virgin Money offers forms to secure loans with promissory notes and tools to remit and track payments.
Virgin Money is part of Sir Richard Branson’s Virgin conglomerate. While Virgin Money is not yet a bank, this program does offer borrowers the opportunity to obtain privately-financed mortgage loans through Virgin Money Family Mortgage and various financial products including credit cards.
Branson acquired Church House Trust in January 2010 which will eventually allow Virgin Money to act as a bank. Plans are in the works for the company to offer checking and savings accounts and real estate mortgages.
In order to obtain peer-to-peer loans, borrowers establish a Virgin Money account. Various packages are available which range in price from $99 to over $500. Three types of loans are currently available and include: personal, business, and mortgages. Loans can be funded through family, friends, or private funding sources.
Family and friends are often hesitant to engage in private lending because of the risk of non-payment. It is not uncommon for borrowers to put personal loan payments at the bottom of their priority list if they are unable to meet loan obligations. Establishing a Virgin Money account can prevent misunderstandings about loan payments and hold borrowers accountable through the use of legally-binding contracts.
Funding sources can determine the rate of interest charged against person-to-person loans, but must comply with state usury laws. Private lenders are prohibited from assessing higher interest rates than banks. Establishing loans through Virgin Money can result in obtaining a lower rate of interest, which provides borrowers a reduced monthly payment and allows them to repay the loan in a shorter amount of time.
Private loans can be established for nearly anything that requires financing. Members have used Virgin Money to pay off credit cards, start or expand a business, pay for college tuition, purchase a car, and buy a house.
Borrowers who use Virgin Money Family Mortgage to buy real estate have access to multiple tools to ensure contracts are legally-binding. Available services include: creating loan proposals, lien management, personal financial coaching, and a payment processing account.
Real estate investors who offer owner will carry financing options may find Virgin Money a good alternative for accepting payments. Borrowers who obtain seller carry back mortgages may find Virgin Money to be a good option for tracking payments.
Buyers who engage in creative real estate financing must obtain bank financing once contracts expire. Virgin Money’s payment tracking software gives borrowers the information required to provide evidence they have made seller-financed payments on time and in full.
Individuals in need of private financing can submit real estate loan proposals to private money lenders. Once financing is obtained, Virgin Money records mortgage contracts and property transfers. Virgin Money utilizes the services of PRBC to report loan payments. PRBC is a credit reporting bureau used to monitor loan payments for financing obtained through nontraditional sources.
Richard Brason Virgin Blog