Q&A: How Oakbrook and Paylink are transforming debt consolidation with ReFi™

Debt is a growing challenge for millions of UK consumers, with household debt climbing to record levels. According to the Bank of England, consumer borrowing  increased by 7.6% year-on-year as of mid-2024, and for many, managing multiple loans, credit cards and an overdraft has become overwhelming. In the face of the cost of living crisis and dwindling savings balances, debt consolidation offers a vital lifeline for households looking to simplify their finances and reduce monthly repayments.

However, the traditional debt consolidation process can be cumbersome and difficult to navigate. Many who would benefit from the financial ‘reset’ of consolidating their debts and budgeting around a single monthly repayment face barriers, such as limited access to credit products, or lengthy processes to settle existing debts.

In response to these challenges, Oakbrook and Paylink have partnered to launch a new debt consolidation solution that leverages Paylink’s ReFi™ technology to simplify the process and make it more accessible.

To understand more about this collaboration and how it’s set to transform the debt consolidation market, we spoke with Claire Smith, Head of Marketing at Oakbrook, and Jake Ranson, CEO at Paylink.

Can you tell us a bit about the driving force behind this partnership and why you decided to launch it now?

CS: We’ve always had strong demand for debt consolidation loans. Many of our customers have expressed a desire to consolidate their debts, but the process has traditionally been complex. The primary issue was that, without an automated solution, we couldn’t reliably ensure that a loan offered for debt consolidation would actually be used for debt settlement. This meant that even though we had many customers who wanted to consolidate, we couldn’t offer them loans due to the uncertainty of repayment of their existing debts.

With Paylink’s ReFi™ technology, we now have a solution that allows us to meet this demand more effectively. The technology ensures that borrowers use the loan to pay off their existing debts through automated debt repayment, which helps both consumers and lenders. The timing is crucial, given the rising cost of living and the growing need for consumers to regain control over their finances.

How does ReFi™ help solve this problem, and what sets it apart from other solutions?

JR: Access to credit matters. It allows families to manage costs, budget, and pursue financial objectives. It is especially valuable during tough times. Being granted credit is not a right though. Before accepting a new customer, responsible lenders like Oakbrook have to be certain that their product is affordable for the customer. The problem that ReFi solves is that by using the new loan to clear legacy debts, lenders now have a secure way to ensure new loans have enabled customers to achieve their financial objective. For customers it means they see fully pre-approved offers they would not otherwise get.

According to latest statistics from The Money Charity, the average UK household debt now stands at £65,665. By conservative estimates UK consumers could save up to £180 million a day in unnecessary interest if they were able to optimise the financial products they hold.  The potential for ReFi™ to make a difference here is significant…

What challenges have customers faced when trying to consolidate their debt, and how does this partnership address them?

CS: Before ReFi™, the process of consolidating debts was quite daunting for consumers. They’d have to contact each creditor individually, request settlement figures, arrange payments to each provider, and wait for confirmations. This could take days or even weeks. The whole process was incredibly time-consuming, and for consumers who were already struggling with financial stress, it often felt like an impossible task.

With ReFi™, the process is seamless. Customers can consolidate their debts into one manageable monthly payment, eliminating the need to deal with multiple creditors. It’s a significant improvement in terms of both convenience and financial relief.

That’s a major benefit for consumers. What kind of impact are you hoping to see in terms of financial inclusion?

CS: We’re already seeing a positive impact. Previously, we weren’t able to offer loans to many applicants due to affordability constraints—essentially, their existing debt payments made it unaffordable to take on another loan. But with ReFi™, we can offer loans to these consumers because their existing debts are consolidated. This opens up credit to people who were previously excluded from borrowing.

In the long term, we expect this to help more consumers manage their finances better. By consolidating their debts into a single, affordable payment, they not only reduce the financial burden but also alleviate the mental stress of managing multiple payments. This is particularly important in today’s climate, where many people are juggling various bills and financial obligations.

How do you see this partnership evolving in the future?

JR: Our North Star is that consumers who have used ReFi™ to get a new loan are able to say, “This worked for me, because….”  As we evidence, through data and outcomes, that ReFi™ helps consumers achieve a budget that works for them and successfully manage their repayments, more lenders will follow Oakbrook’s lead.

A recent study by Fair for All Finance found that 3.7 million British consumers now rely on illegal or unregulated loans. By providing structured debt consolidation through ReFi™, we’re able to offer a legitimate and affordable solution for those who might otherwise be left without options.

CS: We launched the product in a very controlled way, but now we are confident in the solution, we want to expand it to more consumers looking to consolidate their debts. We want as many consumers as possible to  benefit from this, especially given the potential savings in monthly payments and the reduction in financial stress. It’s something that could significantly improve financial wellbeing in the UK.

How do you see the debt consolidation market evolving, and do you think technologies like ReFi™ will continue to shape it?

CS: I believe debt consolidation will become as commonplace as balance transfer credit cards. Consumers are becoming more familiar with these kinds of financial products, and I see a future where debt consolidation is widely understood and easily accessible. Paylink has a unique advantage because of their experience with payments and debt management, and ReFi™ builds on that legacy.

JR: I completely agree. The debt market in the UK has a lot of potential for growth and improvement. In the US, for example, the student loan market is highly sophisticated, with mechanisms in place that allow consumers to refinance their debt multiple times as their financial situation improves. I think we’ll see similar developments in the UK, where consumers challenge the pricing of their loans and seek better deals. It’s an exciting prospect and one that really motivates the team at Paylink to innovate in this space.

What misconceptions do British consumers have about debt consolidation, and how can your solution help change that narrative?

CS: One misconception is that debt consolidation is difficult or risky. In reality, it can be a very effective way to manage debt, particularly when it’s done through a trusted lender. Ten years ago, consumers didn’t know about pre-approval or guaranteed APRs, but now those are standard features. I believe the same will happen with debt consolidation—over time, consumers will come to trust it as a viable option for improving their financial health.

JR: Having trusted brands like Oakbrook on board helps immensely. Consumers need to feel confident that the products they’re using are safe and reliable, and Oakbrook’s reputation for providing accessible financial products and great customer support plays a big role in that.

A new era for debt consolidation

The partnership between Oakbrook and Paylink represents a significant shift in the ‘True’ debt consolidation market. With ReFi™ technology at its core, this collaboration offers a streamlined, more inclusive solution that benefits both consumers and lenders.

As financial stress continues to mount for UK households, innovative solutions like this are crucial for helping consumers regain control of their finances.

Looking ahead, the success of this partnership could pave the way for more lenders to adopt similar technologies, further enhancing financial inclusion and helping consumers simplify their debt management. By making debt consolidation more accessible and affordable, ReFi™ could well become the new norm for consumers looking to improve their financial wellbeing in a challenging economic landscape.

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