The cost of taking out a personal loan with non-bank lender Latitude Financial is set to rise next week, with the company planning to hike rates for most new borrowers by an average of 1 per cent.
Details of the material repricing at Latitude were contained in a memo sent to brokers on Monday.
Latitude offers tiered pricing on personal loans that are mostly determined by the credit scores of applicants.
The best rate available to low-risk borrowers for a variable rate personal loan stood at 8.49 per cent on 18 April, but the best offer will rise to 9.49 per cent from next Monday (24 April).
Applicants with poor credit scores but who might still be eligible for a variable rate loan will also pay an extra 1 per cent over current rates.
New borrowers with low credit scores could pay as much as 29.99 per cent if their credit arrangement with Latitude is unsecured.
In the note to brokers, Latitude said the latest repricing was due to recent movements in official rates and general increases in the cost of funding.
“In light of recent events, we held back communicating a rate change that was to be scheduled for March,” Latitude told brokers.
“To keep in line with prior RBA rate increases and combined with the increasing cost of funds, we have made the following pricing changes to our personal loan interest rates.
“Effective Monday 24th April 2023, Variable Rate Personal Loan and Fixed Rate Personal Loan interest rates for new lending will increase.
“Our interest rates will start from 9.49 per cent p.a. for variable and 11.49 per cent p.a. for fixed.”
Latitude is facing scrutiny from regulators following a cyber-attack last month that resulted in millions of customer records being stolen and protracted interruptions to service platforms.
While the company flagged plans at the start of the year to hike fees on a range of credit cards on 29 March, the increases were deferred until this week when access to online services was restored for most customers.
A Latitude spokesperson confirmed that the fees were increased on Tuesday 18 April.
The fee changes include a $1 increase to monthly service fees on the Latitude Go Mastercard and the GEM Visa credit card.
The new monthly account service fee on these products is now $9.95.
Latitude has also boosted the monthly handling fee payable on 12 credit products to $3.95 from $2.50.
The handling fee is levied when customers make an “in-person” payment to service their credit card.
In a separate notification issued on Monday, Latitude said that it was “gradually” restoring operations following the cyber-attack, including platforms dedicated to servicing brokers.
“We can confirm we have not observed any suspicious activity on our systems since Thursday 16th March,” Latitude told brokers.
“As we gradually restore our operations, we have undertaken an assurance review of the affected platforms and we are reviewing controls where required.
“We have adopted a cautious and methodical approach to bringing our platforms back online.”
Latitude confirmed that it had resumed taking applications for car loans via its eMotor platform.
However, the company said that its broker accreditation service remained offline on Monday.