ClearScore today announces an expanded partnership with Oakbrook, a personal loan provider, to significantly scale the availability of ‘direct settlement’ debt consolidation loans.  

Oakbrook’s debt consolidation loans have been available to eligible borrowers via ClearScore’s marketplace since 2016. With this broader partnership and integrating ClearScore’s newly developed ‘Clearer’ technology, loans will now come with a direct settlement option, whereby outstanding debts are paid straight to creditors on the borrower’s behalf. 

ClearScore secured funding from Fair4All Finance in 2024 to develop its debt consolidation loan technology, ‘Clearer’. Unlike traditional loan offerings, Clearer allows direct settlement of consumer debts, thereby eliminating the risk that the funds will not be used to pay off existing credit cards and loans.  

This technology is currently used on the ClearScore marketplace. It is also expected to be white-labelled for third-party online marketplaces and launched in lenders' direct channels later this year. The addition of Oakbrook represents a significant increase in the volume of debt consolidation loans available to ClearScore users. 

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.”  

Initial results from the pilot phase of Clearer have been promising - yielding far lower annualised default rates than expected based on traditional credit scores. It proved that lenders could issue more loans by improving affordability and could offer better interest rates across debt consolidation loans. Overall loss rates can be lowered plus direct settlement of debt helps lenders comply with Consumer Duty regulations.   

About debt consolidation loans 

A significant challenge in the debt consolidation loan industry is that when lenders provide debt consolidation loans, they don’t have a way of sending the money directly to the creditors to pay off a customer’s debts. As such, they must assume that the customer will spend at least part of the money rather than pay off their other debts. This leads to ‘double counting’ in the underwriting process, which affects affordability assessments. This lowers the number of people they can lend to and increases APRs.  

For customers, this process risks them falling further into debt if they don’t repay their existing credit cards and loans.  With Clearer by ClearScore, repayment is automatic.  

ClearScore estimates that its proposition can boost debt consolidation by 20% which would unlock financial solutions for an additional 160,000 customers by 2028.  

ClearScore’s solution is 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. Clearer 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.