The new offering relieves customers of the need to contact lenders, check balances and settle borrowing themselves, and it improves their access to consolidation loans by automatically repaying existing borrowing, Monzo Head of Borrowing Luke Enock said in a Wednesday (July 8) post on LinkedIn.
Monzo brings each customer’s borrowing together into a single loan and automatically finds and settles the customer’s borrowing directly with lenders, according to the post.
“For customers, that means less admin and confidence that the loan is being used to pay down what they already owe,” Enock said in the post.
Monzo’s automated debt consolidation experience requires a Monzo current account, is available to U.K. residents aged 18 and up, and is subject to eligibility criteria as well as terms and conditions, according to the post.
The company’s representative APR for loans up to 10,000 pounds (about $13,369) is 21.8% APR, while that for loans of more than 10,000 pounds and up to 35,000 pounds (about $46,790) is 10.2% APR, per the post.
Enock said in the post that this new offering is “another example of Monzo’s mission to make money work for everyone in action.”
The solution leverages ClearScore’s Clearer technology, per the post. Clearer is automated debt repayment technology designed to ensure that when a customer takes out a debt consolidation loan, the money is automatically used to pay off their existing debts rather than being used for other purposes, ClearScore said in a February post on LinkedIn.
ClearScore said in a Wednesday post on LinkedIn that it formed a new partnership with Monzo to support the new type of debt consolidation loan.
“For lenders, Clearer delivers guaranteed repayment of existing liabilities, more accurate risk assessment and pricing, lower default risk [and] fully digital journeys with lower cost to serve,” ClearScore said in the post.
It was reported in May that Monzo has dramatically increased its spending on an effort to woo new customers.
Monzo paid out 29.5 million pounds (about $39.7 million) on its “refer a friend” program in the 12 months leading to March, a figure that was almost 40% higher than the same period a year earlier.
