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Recently, the concepts of p2p credits and lending have become quite interesting and sought after. P2p (peer-to-peer) lending is a popular alternative to withdrawing traditional credit from a bank.

Most p2p loans are personal loans that can be used for many different purposes, from a car loan to a home loan or even a small business loan.

What is p2p crediting?

For p2p loans, borrowers receive money from individual investors (people rather than banks) who wish to allocate money at a negotiated interest rate.

P2p credits are unsecured loans from individuals to individuals, unlike bank loans, where loans are provided by banks.

P2p credits are mostly consumer loans or small business loans. But there are also ones for pooling quick loans or refinancing credits .

P2p credits are also called person-to-person credits or social loans.

How to get p2p credits?

How to get p2p credits?

People who have additional savings or set aside offer other people who need cash.

To give and receive p2p credits, there are certain websites (also called web platforms) that link lenders and borrowers.

In Bulgaria, the most famous p2p crediting and investing platform is Klear (website: www.klearlending.com).

Klear connects people who need money with people with savings by providing them with good market conditions. Klear is also a registered financial institution under Art. 3a of the CIP.

The maximum amount you can get through Klear is up to 20000 leva. You can withdraw loans from there for the following purposes: credit consolidation, car credit , home repair, family reunification, property purchase, education, medical needs, unforeseen costs, and more.

How does p2p lending work ?

How does p2p lending work ?

As we said p2p, crediting is done through certain web platforms. Here’s the process in general:

1. Create an account and confirm the web platform account for p2p credits.

To create an account, you need to fill out your personal information. They are similar to the traditional application process for bank loans or credit cards and include things like ID card details, payment order to prove income, etc.

The platform then checks your documents and personal information as well as your credit history in the CCR credit registry. If your documents are fine, you will be asked for an online loan.

2. Financing of loans

Successful application for credit will be announced on the platform and on the pages of the lenders. The landlords will see your account and your credit history and decide whether to grant you credit or not.

3. Signing a loan agreement and receiving the money

In this step you will need to sign a loan agreement and submit all the final documents.

Most often within two days (or sooner) after signing and checking the contract, the money (credit amount) will be paid into your bank account.

4. Repayment installments

At the specified due date, you have the obligation to make monthly repayments to repay the loan.

P2p platforms note whether you regularly pay your credit in your credit history in the CCR, so maintaining a good payment history will help improve your credit score.

What are the benefits of p2p lending?

  • Convenience – the application process is online and extremely fast and easy. Approval is also very fast – once you have entered your personal information in the system. You can apply regardless of where you are, as long as you only have access to the Internet.
  • Lower interest rates for borrowers . A number of p2p credits have lower interest rates for borrowers than consumer credit interest rates in some banks and credit cards. P2p credits are also at times lower interest rates than those of fast loan companies or other similar financial institutions.
  • Fewer charges . Another advantage of p2p crediting is that you will not have so many charges. Banks or other creditors typically have an application fee, processing fee, and a few other charges. In p2p lending, most of these canes are missing.
  • Higher interest rates for lenders . Instead of leaving their money in a bank deposit against a low rate, borrowers get a higher interest rate than p2p lending than if they put their savings on a bank deposit. Overall, p2p crediting lenders receive higher interest rates and borrowers have lower interest rates than other financial institutions. This is one of the main reasons why it has gained increasing popularity in recent years.

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