April 14th, 2009
Virgin Money Review
Virgin Money is lending site that offers unique financial services that range from the traditional mortgage, to social lending between a borrower and lender. In 2008 Sir Branson made his first head winds into the US financial markets buying Circle Lending. Circle Lending was originally a service that enabled consumers to put structure around lending between friends and family including interest and payment term details through promissory notes and standard contracts. All in all, they wanted to make sure you could still invite your family and friends over for the holidays even if you are lending from them.
Sir Richard Branson and team took this foundation for lending and have began to broaden the Virgin Money offerings to include direct lending, just like Bank of America, Chase, or Wells Fargo, as well as build out contract services to include other types of loans.
But first, let’s take a quick flight through the site:
Look and Feel
The website is very clean and it is obvious that Virgin Money didn’t spare expenses on the web development budget. The familiar red, bold Virgin logo tops the homepage and projects the strong brand presence. The site is smartly compartmentalized, with each tab directing the user to the various products offered on the site, real estate, business, personal or student loan. The site projects a collaborative feel from the stick figures joining together to boost someone up, to the fact that they are joining the green movement and reducing their carbon footprint. Consistent with the other Virgin brands, the overall spirit of the Virgin Money site projects a world-conscious, family oriented and friendly look and feel.
An important distinction to make is that Virgin Money business is split between social lending and direct lending. The site could do a better job denoting this distinction as the direct lending is actually lost in the Real Estate section of the site. Let’s take a look at these two primary business types that Virgin Money offers:
Direct Lending
The direct lending portion of Virgin Money’s business is relatively new, and they operate just like any other bank or lender would, but with Virgin flair. As you dig to learn more about the Virgin Money loans you are prompted to enter relatively standard contact and some basic information about my mortgage and their customer service called me in a few minutes later.
In my previous incarnation, I worked in the mortgage industry, so all the jargon and program terms came back to me in a flurry. I asked some specific questions about points and closing costs. I was pleasantly surprised by the low closing costs they quoted me only $1,999, which is a good deal cheaper than what some brokers and banks will charge you. I inquired about their mortgage rates for my lending situation, and I found the rates they quoted were competitive with the rates I had received from Countrywide, as well as rates quoted to me by other brokers.
Without going through the entire process, it’s hard to gauge how well Virgin Money has gotten the kinks out of their mortgage product. But I can say the product is competitive and that everyone I spoke to was enthusiastic, helpful, and really seemed willing to go the extra step to make the customer happy. Great customer service is a Virgin company calling card, and Virgin Money is no exception.
On a side note, it’s very exciting to see a company with Virgin’s backing enter the mortgage space, and I hope that they do very well. You know their customer service will be top notch, their rates are competitive, and they bring a fresh perspective on a slightly antiquated mortgage process. With all the fallout in the industry there is a huge opportunity, as well as a significant gap in the market, that can be filled by Virgin Money.
Social Lending
The other portion of Virgin Money’s business revolves around person to person, (P2P) lending. Virgin Money enables friends and family to loan to one another in a structured environment by providing standard forms and agreements for borrowers and lenders to document the loan terms. While this was originally offered only for personal loans, Virgin Money has expanded their loan documentation services to include real estate, business and student loans. Packages start as low as $99 for a personal loan agreement, while the high end business package will cost you $299. Not a bad price to get all your paperwork organized, terms documented and formal piece of mind that the agreement is binding. Another thing to note, Virgin Money will report these loans to the credit bureaus. If you keep your loan in good standing, you’ll be rewarded with higher credit scores.
As you consider either a direct mortgage or a loan from friends and family, one really cool tool that Virgin Money offers is the “Lender Blender.” First, you enter the total amount you need to borrow, and then you can choose different loan sources (Family, Federal Loan, Private Loan, etc) and detail how much you anticipate borrow from each source at what interest rate. The “Lender Blender” then mixes everything up for you and smoothly churns out your blended interest rate and total payments across all loan sources.
What’s next for Virgin Money?
With the strong financial backing and brand of their parent company it’s exciting to know Virgin is now a new player in the financial services market.
Virgin Money has a huge opportunity to make an impact and carry that success into other financially related endeavors. I expect Virgin Money to continue to roll out products similar to the more traditional banks but with a new type of service and spirit one would expect from a Sir Richard Branson business.
Click here to get a great deal on a Virgin Money Mortgage
experienced building company needing loans for pre sold and model homes to be constructed and sold in Chico Ca. Company doing business in Chico over 16 yrs with excellent track record until banks pulled out
Virgin Money is no longer offering social loan contracts and they are not amending existing contracts.
Robert is right… Virgin Money is no longer offering mortgages, student loans, or even loan servicing on peer-to-peer loans. Learn more here.
I wish I had something good to say about these guys. I signed up with them a few months ago to get a loan from a family member to refinance my mortgage. It was a pretty large loan, so we opted for the full-service loan package, which handles e-payments and collection in the event the loan goes bad (about $700).
No sooner was the ink dry than Virgin discontinued the product and handed off all its old loans to another company. My first payment was due two weeks ago. But I can’t log into the new website–I get as far as seeing my loan, but clicking on it gets me to another login page that won’t accept my password. They have a bunch of different phone numbers, some with hideous wait times, and sometimes their customer service number goes straight to voicemail. I finally got a human being a couple days ago who said she’d talk to “IT,” but when I called today the person who answered the phone had no record of any conversation about my account. Now I am waiting for an email from them.
These guys have access to my bank account. I’m starting to regret that.
It’s too bad. I’m delighted with the idea of DIY mortgages, and I’m thrilled a relative is getting the interest on my loan instead of a megabank. I want to give Virgin’s social loan program the benefit of the doubt, but from how they’ve handled my loan so far, it kinda seems like the whole operation is run by a guy in a basement getting paid $12 an hour to answer the phone and pretend he’s a major multinational business.
L.Harris, I wish I had read your email before signing with these guys. You are absolutely right. I don’t know what’s going on but their current operation seems very, very fishy. I was an existing customer with an existing P2P loan setup with them. When I initiated a second loan, their website charged me $99. And I get from non-existent to very bad service from them. Most of the times, they don’t respond to emails. When they do respond, they gave completely wrong and inconsistent answers. Their phones do not work.
L.Harris, what have you done in your situation?