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Experian’s Strategic Purchase of ReFi Highlights Commitment to Combatting Revolving Debt Crisis

Introduction

Experian has announced that ReFi™, a top-tier debt consolidation technology from Paylink Solutions, will be integrated into the Experian Consumer Services Marketplace. This move will benefit consumers and lenders who are facing affordability and debt consolidation challenges. According to research conducted by Experian for Fair 4 All Finance, 41 million UK consumers have credit products, with 83% (34 million) of these products comprising revolving debt that is unoptimized. The primary reason consumers seek for loans on the Experian Marketplace is debt consolidation. Nevertheless, a significant number of individuals who require these loans are unable to qualify due to affordability restrictions. At present, consumers are at risk of “double counting” when they register for a debt consolidation loan, as it is presumed that their original debts will be included in the affordability assessment along with the new consolidation loan. This is due to the fact that lenders are unable to guarantee that the funds will be used to pay off existing debts. Consequently, creditworthy consumers are denied loans due to affordability concerns, which leaves them trapped in a debt cycle.

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This issue is resolved by ReFi™, which collaborates with lenders and consumers to resolve the debts of consumers directly with their existing creditors. This approach provides lenders with the assurance that the existing debts will be resolved, and the consumer only needs to be evaluated for the requested debt consolidation loan. The debt consolidation process is simplified for consumers by closing previous accounts after the debt has been paid off. Experian data indicates that only 37% of debt consolidation loan applications are pre-approved on the Experian marketplace, while 59% of credit card applications are pre-approved. According to research, over 3 million individuals have utilized an unlicensed lender or loan shark, while over 10 million have borrowed from friends and family. This vacuum has the potential to result in unlawful lending practices.3By utilizing its distinctive capabilities, ReFi™ will allow the data technology firm to offer improved assistance to consumers who are struggling with debt, while simultaneously equipping lenders with the necessary tools to uncover affordable and creditworthy lending opportunities for UK consumers.

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Industry Comments

Edu Castro, Managing Director of Experian Consumer Services, said: ”Our research shows that millions of consumers are stuck in a revolving debt trap, due to the systemic issue of ‘double counting’ when consumers apply for debt consolidation products. ReFi™’s innovative solutions will play a crucial role in addressing the debt challenges faced by many consumers, unlocking access to debt consolidation products that could help them save money on their debt and even pay it off sooner.

“Adding ReFi™ from Paylink aligns with our mission to empower consumers and support lenders in making informed, responsible lending decisions.”

Jake Ranson, CEO of Paylink said: “The team who built ReFiTM feel tremendously privileged to already have helped thousands of people reduce their monthly outgoings and cut the amount of interest they have to pay overall.  Becoming part of Experian will enable us to further innovate, accelerate and grow the impact ReFiTM will have on delivering better outcomes for lender and borrower alike.”

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FAQ 1: What is ReFi™ and how does it work?

ReFi™ is a debt consolidation technology developed by Paylink Solutions and now integrated into the Experian Consumer Services Marketplace. It addresses the common problem where consumers who apply for debt consolidation loans often struggle with affordability assessments due to the risk of “double counting” existing debts. ReFi™ works by settling a consumer’s debts directly with their creditors, ensuring that lenders are confident the original debts will be paid off. This allows the consumer to be assessed solely for the debt consolidation loan they are applying for, simplifying the process and improving the chances of loan approval.

FAQ 2: Why is ReFi™ important for consumers seeking debt consolidation?

ReFi™ is particularly beneficial for consumers who are struggling to qualify for debt consolidation loans due to affordability restrictions. Many consumers face the challenge of having their original debts considered alongside their consolidation loan, leading to unnecessary loan rejections. ReFi™ eliminates this issue by ensuring that the existing debts are settled directly with creditors before the new consolidation loan is assessed. This process not only improves the chances of loan approval but also helps consumers avoid illegal lending practices or borrowing from unlicensed lenders, providing them with a safer and more reliable way to manage their debt.

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FAQ 3: How does ReFi™ help lenders and improve the debt consolidation process?

ReFi™ offers lenders greater confidence in the debt consolidation process by ensuring that existing debts are directly paid off before a new loan is granted. This reduces the risk of loan rejection due to affordability concerns and allows lenders to assess consumers solely based on the new loan request. By simplifying the debt consolidation process, ReFi™ helps lenders unlock more affordable lending opportunities for creditworthy consumers who might otherwise be denied. This enhances the lending experience for both consumers and lenders, promoting responsible borrowing and lending in the UK market.

Conclusion

The integration of ReFi™ into the Experian Consumer Services Marketplace marks a significant improvement in the debt consolidation landscape, addressing both consumer and lender challenges. With millions of UK consumers facing difficulties in managing revolving debt, ReFi™ provides a solution by directly settling debts with creditors, enabling consumers to be assessed only for the new loan. This eliminates the issue of “double counting” existing debts and enhances loan approval rates. By offering a streamlined and safer debt consolidation process, ReFi™ empowers consumers to manage their finances more effectively while providing lenders with the tools to offer more affordable and creditworthy lending opportunities. This partnership aims to reduce reliance on illegal lending and promote responsible financial practices, ultimately benefiting both consumers and lenders in the UK.

Thank you for exploring this journey with us! If you’d like to share your thoughts or join the discussion, please contact us at news@intentamplify.com.

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