Experian Partners with Paylink to Streamline Debt Consolidation

On 2nd September 2024, Experian announced a strategic partnership with Paylink Solutions aimed at addressing the barriers associated with debt consolidation loans. By integrating Paylink’s innovative ReFi product into the Experian Marketplace, the collaboration seeks to improve access to credit for a broader segment of consumers.

Addressing Debt Consolidation Challenges

Debt consolidation remains a significant driver of loan searches on the Experian Marketplace. Despite this, Experian data highlights a stark disparity in loan approval rates. Only 37% of debt consolidation loan applications are pre-approved compared to 59% for credit card applications. This shortfall often results in individuals seeking alternative, sometimes illegal, lending options. More than three million people in the UK have resorted to unlicensed lenders or loan sharks, while over 10 million have borrowed from friends and family.

Eduardo Castro, Managing Director of Experian Consumer Services, commented, “As people continue trying to get on top of their finances amid the increased cost of living, our aim is to remove any barriers that will prevent them from doing so. Our new partnership with Paylink will allow us to unlock access to credit for more consumers seeking to simplify the process of managing their debt.”

Introducing ReFi by Paylink

The ReFi product by Paylink addresses the common issue where lenders cannot directly pay off existing debts. Instead, lenders rely on borrowers to appropriately use loan funds, complicating the underwriting process. This often leads to loans being deemed unaffordable due to the need to account for both new and existing debts. ReFi simplifies this process by enabling customers to settle their existing credit commitments directly with lenders through a streamlined approach.

Jake Ranson, CEO of Paylink, stated, “Against the backdrop of a prolonged cost-of-living crisis, ReFi has already proved its value to thousands of customers who, by shifting legacy debts to a new, more affordable loan, have transformed their monthly household budgets. ReFi enables a financial ‘reset,’ potentially leading to significant savings and quicker debt repayment.”

Benefits for Consumers and Lenders

The partnership is designed to foster financial inclusion and offer a valuable tool for lenders to reach a broader customer base. By consolidating legacy debts—such as credit cards, personal loans, retail credit, and overdrafts—into a new loan with more favourable terms, ReFi not only simplifies debt management but also reduces monthly costs and mitigates the risk of further debt accumulation.

Eduardo Castro added, “The benefit of this partnership is twofold, as the ReFi solution offers a valuable tool for lenders to expand their offerings and reach a broader customer base that may have originally been overlooked.”

Conclusion

The collaboration between Experian and Paylink marks a significant step towards improving financial accessibility and inclusion. By addressing the complexities of debt consolidation through ReFi, this initiative promises to provide consumers with a more manageable path to financial stability while also offering lenders a means to extend their services to a wider audience.