Nottingham-based consumer lending platform, Oakbrook Finance, has expanded its fintech partnership with financial services marketplace, ClearScore, in order to scale debt consolidation loans through direct settlement technology.
The collaboration will see Oakbrook adopt ClearScore’s ‘Clearer’ technology to provide loans with a direct settlement option, whereby outstanding debts are paid straight to creditors on the borrower’s behalf. This eliminates the risk that funds will not be used to pay off existing credit cards and loans.
Oakbrook’s debt consolidation loans have been available to eligible borrowers via ClearScore’s marketplace since 2016. The expanded partnership represents a significant increase in the volume of debt consolidation loans available under the collaboration.
ClearScore launched Clearer as an automatic debt repayment tool in July 2023 and further developed it through a £3.4 million funding agreement secured with Fair4All Finance in 2024. The cloud-based service can be used both on the ClearScore marketplace and as a white-label solution with API integration for third-party online marketplaces.
Addressing Industry Challenges
The partnership addresses a significant challenge in the debt consolidation loan industry. When lenders provide debt consolidation loans, they typically cannot send money directly to creditors to pay off a customer’s debts. This forces them to assume customers will spend at least part of the money rather than pay off their other debts, leading to ‘double counting’ in the underwriting process.
This affects affordability assessments, lowering the number of people lenders can serve and increasing APRs. For customers, the process risks them falling further into debt if they don’t repay their existing credit cards and loans.
Initial results from the pilot phase of Clearer have been promising, yielding far lower annualised default rates than expected based on traditional credit scores. The technology proved that lenders could issue more loans by improving affordability and could offer better interest rates across debt consolidation loans.
Market Impact and Future Plans
ClearScore estimates that its proposition can boost debt consolidation by 20%, which would unlock financial solutions for an additional 160,000 customers by 2028. The technology is expected to launch in lenders’ direct channels later this year.
Andy Sleigh, COO at ClearScore, said:
“Oakbrook is a longstanding partner to ClearScore and we are excited to extend that partnership to include debt consolidation loans via Clearer, our direct settlement technology. Oakbrook will help us significantly expand debt consolidation loan options and reduce interest rates paid by our users. Ultimately, this will help thousands of borrowers, including people in financially vulnerable circumstances.”
Claire Smith, Head of Marketing at Oakbrook, added:
“We are delighted to help ClearScore scale debt consolidation loans which could save people a significant amount in their monthly repayments. ClearScore’s cutting edge technology for directly settling consumer debts allows us to offer loans to people who might otherwise be excluded from mainstream lending products. We plan to scale our lending in this space as a result.”
This expanded partnership could influence how other UK fintech firms approach debt consolidation solutions in the coming years, with ClearScore’s solution built to be robust and scalable using the latest cloud-based technologies.
ClearScore makes it simple for lenders to integrate with its platform via a single API, enabling lenders to offer Clearer quickly and easily within a matter of weeks. The system encrypts data at the point of collection with a highly automated solution, using bureau data to surface existing debts, which minimises user input and error.
