Virgin Money Overview
Virgin Money was a person-to-person (P2P) lending service for arranging and formalizing loans with people you know. Through P2P lending, you skip the bank and borrow from an individual, a group of individuals, or (increasingly) a marketplace of financial institutions. This page is an overview of Virgin Money and the various available options.
Virgin Money no longer operates this lending service in the U.S. Other vendors, including those named below, might be able to provide the services you need.
Virgin Money was previously CircleLending, and again, is no longer in business for U.S. borrowers. The market continually changes, but the following services might provide the help you need with a loan.
- For mortgage loans, National Family Mortgage might be an option.
- For personal loans, consider LoanBack or LendingKarma
Please research these service providers carefully before using them, as we do not have direct experience with their products.
Credit reporting: A key feature to investigate is credit reporting. If the borrower is hoping to build up their credit history, it’s best to report the loan and payment activity to credit bureaus. However, some service providers do not include that feature. You don’t necessarily need to use credit bureaus, but doing so can help the borrower qualify for better loans in the future.
Whether or not your activity ends up in credit reports, it’s still helpful to use a third party when arranging a loan between friends, family, and others. That practice can help avoid confusion and damage to valuable relationships.
For best results:
- Create a written agreement that includes the loan amount, how and when payments are due, and other important details about the loan.
- Discuss what happens if a borrower can’t make payments, and include that information in the agreement.
- Evaluate ways to protect the lender, including formalizing an ownership interest in the borrower’s property.
- Decide if it’s worth putting relationships at risk. Thanksgiving dinner can become awkward even if things are on track—but expect gatherings to be uncomfortable if there’s an ongoing dispute about money.
Learn more about best practices when borrowing and lending with family.
The information below describes how the Virgin Money product used to work for U.S. customers.
How Do You Get a loan?
You don't borrow directly from Virgin Money. Instead, you find a lender on your own and use Virgin Money as a service provider. You might ask your friends, family, and contacts to loan you money, and then Virgin Money steps in as an intermediary.
If you can't find anybody to lend you money, you might try a lending marketplace like Prosper.com.
You and your lender agree on a rate, and Virgin Money uses that rate. Please consult with a tax advisor before choosing a rate, as there may be tax consequences involved.
Repayment Schedule and Terms
Again, you and your lender decide when repayment begins and how it happens. Virgin Money allows for flexibility that you might not find elsewhere. For example, you don't have to start repayment immediately, or you might use a seasonal repayment schedule so that you can pay when your income is higher.
Depending on the product you choose, Virgin Money will take care of the payment process and transfer money from your bank account when payment is due.
There are a variety of programs available. The entry-level product currently costs $99 (this is no longer available—see above). If you want Virgin Money to provide more services, the cost increases. Unfortunately, there is a fairly steep cost associated with each electronic payment.
Depending on the program you choose, you can get a lot or a little. Virgin Money will provide loan documents and repayment (or amortization) schedules for basic loans. They can also:
- Draft payments electronically (via ACH debit)
- Provide title and escrow services
- Coach potential borrowers and lenders
- Create loan proposals
- Manage liens
Other services are available as well.
- Virgin Money's Family Mortgage Product
Virgin Money can report activity to PRBC, an "alternative" credit reporting company that is increasingly used by mainstream lenders.
Virgin Money gives you a way to formalize informal loans. Doing so gets everybody on the same page and can help reduce disputes among friends and family. If you need some guidance and structure, Virgin Money can help make it happen.