UK digital bank Monzo has launched a new automated debt consolidation service in partnership with ClearScore, the financial marketplace and credit insights platform. The collaboration introduces ClearScore’s Clearer technology to Monzo’s lending platform, allowing customers to combine multiple existing debts into a single loan with far less manual effort than traditional methods.
In conventional debt consolidation, borrowers often face a lengthy series of steps: locating account details across different lenders, checking current balances, contacting creditors to arrange payoffs, and ensuring the new loan funds are actually used to clear the old debts rather than spent elsewhere.
These tasks can feel overwhelming at a time when people are already under financial pressure.
Monzo’s solution changes that dynamic. Customers start by checking their eligibility for a loan inside the Monzo app.
The process pulls relevant information from the user’s credit report through ClearScore, displaying eligible personal loans, credit cards, and store cards in one clear view.
Borrowers then select which balances they want to consolidate. Once approved, the selected amounts are paid directly to the original lenders.
The funds do not land in the customer’s Monzo account unless they choose to borrow more than the total being repaid.
This direct-settlement approach removes several friction points.\
It prevents the risk of the loan money being used for other purposes and reduces the administrative burden of chasing multiple creditors.
Approved balances are typically cleared within a few working days, with progress updates delivered through the app.
Customers then repay just one fixed monthly instalment to Monzo over an agreed term and can overpay or settle the loan early at any time without fees.
Monzo’s General Manager for Borrowing, Luke Enock, explained the thinking behind the feature: debt consolidation should help people feel better, not worse.
The automated experience brings borrowing together into one loan while handling settlements directly with lenders, delivering less admin and greater confidence that the new facility is being used to reduce existing obligations.
The service is available to UK residents aged 18 and over who have a Monzo current account, subject to eligibility criteria and standard terms and conditions.
It currently covers debts held with other lenders; existing Monzo borrowing products such as Flex or personal loans cannot yet be included, though the bank has indicated it is exploring future options.
Representative APRs are 10.2% for loans from just over £10,000 up to £35,000, and 21.8% for loans up to £10,000.
As with any consolidation, customers should consider that original lenders may charge early-repayment fees and that spreading payments over a longer period could increase the total interest paid.
By integrating automated repayment technology directly into its app-based loan journey, Monzo has now reportedly become the first UK bank to offer this level of streamlined debt consolidation. The partnership demonstrates how open banking data and specialist fintech tools can reduce complexity in personal finance, helping customers regain control of their borrowing with greater ease and transparency