How Klear manages the credit risk?

1. The right product for the purpose

Our loan product is designed to be attractive to the creditworthiest borrowers.

Its interest rate starts from 5.7%.

Its average price (APR) is 15-20% lower than the average of banks.

Everything happens online. The contract is signed electronically, and the disbursement is immediate.

It is super simple – one fee only due when the loan is disbursed. There is no additional fees for insurance, no need for guarantors, no mandatory requirement for a salary transfer to a specific account, no fee for early repayment. No bad surprises.

2. Filtering of borrowers

We receive loan applications from people with a wide range of risk profiles.

Yet Klear finances only the creditworthiest borrowers, those with regular and proven incomes, low indebtedness and a perfect credit history.

At the end of the day, we approve only 10% of all credit applications.

3. Verifying the data

We collect a significant amount of data to ensure a proper analysis.

We verify and supplement the data with online queries to the NSSI, the CCR, and other publicly available sources including the social media.

We check both, the borrower and their partners (if such).

If we are not fully convinced about the data correctness, we do to not approve the credit.

4. Credit scoring

Our strength lies in our experience and knowledge in consumer lending.

We use own inhouse developed scoring models that assess the probability loan defaults, as well as algorithms that identify different risk types, fraud attempts and related persons.

5. Risk based pricing

Our strength lies in our experience and knowledge in consumer lending.

We use own inhouse developed scoring models that assess the probability loan defaults, as well as algorithms that identify different risk types, fraud attempts and related persons.

6. Analyzing the budget and the project

We use statistics and different methods to get closer to the real household expenses of the borrower, and we test the budget to identify its weak points.

At Klear, we spend a lot of time and attention to get acquainted with the loan purpose.

7. Notifying for upcoming due date

Before the first due date, we make sure that the borrower is aware of when and how to pay the installment.

We continue to send reminders before each due date considering each specific situation.

8. Motivating to be on time

In our communication with borrowers, we pay close attention to how payment patterns affect them, as well as the investors.

Any delay is reported in the CCR, managed by Bulgarian National Bank.

Klear adapts its tone and actions according to the borrower's attitude and engagement toward problem-solving.

9. Dealing with temporary difficulties

In case of a delayed payment, we immediately contact the borrower to find out what the problem is. We try to help him/her recover the payments regularity.

We have all necessary tools to adapt the repayment plan of a borrower in trouble according to his/her situation.

10. Selling the bad debts

In lending there is a risk that the borrower may not be able to repay the debt.

If the delay exceeds 120 days, Klear sells the debt to an external debt collection agency, selected among many through a tender. The recovered amount from the sale is distributed to the investors.

We also bear the loan risk.

Klear finances the loans with own funds and only later lists them on the market for sale to individual investors. This means that we also bear risk just as any other investor on the platform.