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Lender launches loan with repayment-free term

by Charbel Kadib5 minute read
Latitude launches loan with repayment free term

Non-bank lender Latitude Financial has rolled out a new personal loan offering with a repayment-free window.

Latitude Financial has announced the launch of its Better Start product, a debt consolidation loan that comes with no repayments and no interest charges for the first three months.

The product – which is available to new customers until 29 March 2020 through the broker channel – has been designed to help customers "better manage their debts" by providing them with an interest-free and repayment-free period.

It is available for borrowers looking to consolidate their debts into one personal loan with a value of at least $20,000.

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Latitude noted that upon settlement of the loan, it would directly pay out existing credit card balances or loans held by customers at other financial institutions.

The product also enables customers to make voluntary repayments during the three month repayment-free period without incurring interest.

After this three-month period, interest would be applied (with rates starting from 6.99 per cent for secured loans (comparison rate, 8.25 per cent) and from 7.99 per cent for unsecured loans (comparison rates, 9.24 per cent).

According to Latitude, the new offering aims to meet growing demand for debt consolidation services, with the non-bank citing research from the Australian Bureau of Statistics (ABS) that shows that over $1.4 billion in debts were consolidatedin the 12 months to November 2019, an increase of 23 per cent from the previous year.

Latitude’s general manager, lending, Rohan Harrap, commented: “We want to help customers with better money habits.

“Latitude commissioned research in January [which showed that] almost 60 per cent of consumers are prioritising saving more money and looking to sort out personal finances in 2020.

“They want to get back in control of their finances (especially after Christmas) by consolidating their debts, having one single monthly repayment schedule, and be able to take a short-term break on their payments while they get organised for the year.

Better Start addresses these needs in one simple and easy to understand product.

Lee Slattery, Latitude’s general manager of B2B, added: “Better Start offers something new in Australia, and we are excited that our brokers will be offering it.

“It gives customers a three-month break in both repayments and interest on the loan, allowing customers to get the year off to an easier start while they consolidate their debts and organise their finances.”

Mr Slattery also noted the contribution of the broker channel in delivering strong customer service outcomes and bolstering the non-bank’s reach in the market.   

“Brokers are an important partner, helping customers manage their financial wellbeing,” he said.

“We have seen double-digit growth every year since partnering with brokers on personal and motor loans.”

Mr Slattery concluded by stating that he expects Latitude to continue growing through the broker channel as it rolls out new products.

[Related: Wisr sees 36% increase in loan originations]

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Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

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