Monzo partners with ClearScore to offer automated debt consolidation

Monzo has integrated ClearScore’s ‘Clearer’ technology to offer a debt consolidation loan that automatically finds and settles a customer’s existing borrowing directly with lenders in a single monthly payment, in what it claims is a “first” for a UK bank.

According to research conducted by ClearScore and Disrupt Insight, around 21 million UK adults have two or more different credit products.

Of the 1,017 UK adults surveyed, 60% believe debt consolidation can help simplify their monthly payments and more than half think it can reduce stress.

Luke Enock, general manager for borrowing at Monzo, said: “Debt consolidation should help people feel more in control. But too often, it means more admin at the exact moment people need things to feel simpler.”

In a post on LinkedIn, Enock explained that the way it currently works creates three common barriers, including customers having to contact lenders, check balances and settle borrowing themselves.

He also noted that because existing borrowing is not automatically repaid, lenders need to assess affordability as though those balances will remain, meaning that fewer people are accepted for a consolidation loan.

Monzo’s own research found that many people worry a consolidation loan could leave them with more borrowing, rather than less.

Enock said: “Monzo is offering customers a new way to bring their existing borrowing together into a single loan. We’ll automatically find and settle a customer’s existing borrowing directly with lenders, through ClearScore’s Clearer technology.

“For customers, that means less admin and confidence that the loan is being used to pay down what they already owe.”

He added: “Thank you to our teams at Monzo and our partners at ClearScore for helping bring this to life.”

Further reading: ClearScore Group moves into mortgages with acquisition of Acre

Jessica Bilcock, public policy and vulnerability manager at Monzo, is speaking at Open Banking Expo UK & Europe on 13-14 October at the Business Design Centre in London. Click here to find out more about the agenda, speakers and exhibitors.