Virgin Money – Keeping it in the Family

Peer-to-Peer lending (often referred to as P2P) is one of the fastest growing financial service offerings today. And for good reason – peer to peer lending often results in lower interest rates and more flexible terms for borrowers, and higher yields for lenders with low default rates. The internet has made P2P lending possible on a global scale, and allows the creation of new opportunities for both borrowers and lenders.

Virgin Money specializes in facilitating loans between friends and family members. This differs from other P2P online lending sites such as Lending Club which involves matching up borrowers and lenders who don’t know each other in a financial services twist on online auctions or dating. With the borrower and the lender coming together to facilitate a loan, there is a deeper personal commitment that comes with the transaction – a longstanding relationship.

Having originated over $370M in social loan volume, Virgin Money is the leader in managing loans between friends and family, and a pioneer in the emerging social finance sector. They have expanded their offerings to include traditional home mortgages in addition to the peer-to-peer model. Virgin Money offers unique financial services and a customer experience that most banks cannot match.

For friends or family members who want to borrow money from, or lend money to each other, Virgin Money offers a simple affordable way to facilitate the structuring and payment servicing of those loans. Unlike other peer-to-peer lenders or banks, Virgin Money allows friends and family members to set and modify interest rates, repayment terms, and all other aspects of the loan whenever they want to. And because the borrower and lender know each other, the personal relationship is preserved by having the loan set up in a formal, but flexible structure through Virgin Money.

Virgin Money’s “family and friend” model foregoes the auction-like process entirely and concentrates on borrowers and lenders who already know each other, as with two friends or business colleagues formalizing a personal loan. Whereas the primary benefit of the marketplace model is the “match making” aspect, Virgin Money’s model emphasizes online collaboration, loan formalization, servicing and relationships.