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This paper focuses on the behavior of prefabricated thermal drains used to improve saturated clay layers using heating. A prefabricated thermal drain can be formed by integrating a closed-loop geothermal heat exchanger within a conventional prefabricated vertical drain (PVD). Prefabricated thermal drains can be installed in a similar way to a PVD but operate by circulating a heated fluid through the heat exchanger tubing to induce an increase in temperature of the soft clay. This increase in temperature will lead to thermal consolidation, which can be accelerated by drainage through the PVD. Although thermal drains have been tested in proof of concept field experiments, there are still several variables that need to be better understood. This paper presents numerical simulations of the coupled heat transfer, water flow, and volume change in layers of kaolinite, illite and smectite clays within a large-scale oedometer with a prefabricated thermal drain embedded at the center. Thermally induced excess pore water pressures and a slight initial expansion was observed for clay layers with lower hydraulic conductivity. However, the overall volume change resulted in contraction where the rate as well as the magnitude of settlement was greater for a thermal PVD compared to a conventional PVD. A further analysis of kaolinite layers with different initial porosities indicated that the increase in the magnitude of settlement observed when using a thermal PVD was independent of the hydraulic conductivity of the clay whereas the increase in the rate of settlement was more pronounced for clays with lower hydraulic conductivity.