Janice Lozano
If you're a New Zealander with a student loan and you're planning to move overseas, there are a few things you need to know about repaying your loan. Firstly, your student loan will no longer be interest-free from the day after you leave the country. The amount of interest charged depends on how long you're away for. If you're outside of New Zealand for around 5 out of 6 months, you might become overseas-based and your loan will no longer be interest-free. You'll need to manage your loan repayments yourself, and you can do this through your bank. There are several repayment methods you can use, including online money transfer agencies and direct debit payments. It's important to plan ahead and set up regular payments to stay on track.
| Characteristics | Values |
|---|---|
| Interest charged on the loan | Interest is charged on the loan from the day after the borrower leaves New Zealand. Interest is calculated daily and added to the loan balance at the end of the tax year. |
| Interest-free loan | The loan remains interest-free if the borrower is away from New Zealand for up to 6 months. In some cases, the loan may remain interest-free for longer, such as when taking up a New Zealand Government job overseas. |
| Repayment suspension | Borrowers may be eligible for a temporary repayment suspension of up to 1 year if they are overseas. However, interest will continue to be charged during this period. |
| Minimum repayments | Minimum repayments are required while the borrower is overseas. The amount is based on the loan balance when the borrower becomes overseas-based. |
| Due dates | Payments are generally due by 30 September and 31 March. |
| Payment methods | Payments can be made online using a money transfer agency or a credit or debit card. Direct debit payments can be set up for borrowers based in Australia, the UK, Europe, Canada, or the US. Payments can also be made from an Australian bank account using internet or telephone banking. |
| Payment frequency | Regular weekly or monthly payments are recommended. |
| Managing repayments | Borrowers are responsible for managing their loan repayments while overseas and should ensure payments are made on time. |
Explore related products
What You'll Learn
Managing payments and interest
When you are based overseas, you will need to manage your student loan payments yourself. You will no longer be a New Zealand-based borrower, and your loan will no longer be interest-free from the day after you left the country. You will need to make minimum repayments on your student loan or apply for a temporary repayment suspension. You can also apply for a repayment suspension if you plan on returning to New Zealand within a year.
Your student loan repayments will be based on your loan balance when you become overseas-based, not your total income. You can use the 'Overseas travel calculator' in myIR to keep track of how long you're away from New Zealand and calculate when interest is charged. You can also use the student loan repayment calculator to see how long it will take to pay off your loan with minimum and extra repayments.
If you are based in Australia, the United Kingdom, Europe, Canada, or the United States, you can set up direct debit payments in your myIR account. You can also set up automatic payments at your Australian bank by downloading and printing the 'Automatic Payments – Australia' form and submitting it to your bank. You may be charged a fee for this service.
You can also pay online using a money transfer agency called OrbitRemit. This service is free, and you can use your debit or credit card. However, if you're paying by credit card, you could be charged interest if you don't pay on time. You can also get someone in New Zealand to act on your behalf and make payments for you.
Strategic Ways to Quickly Pay Off Student Loans
You may want to see also
Explore related products
Payment methods from overseas
When you're based overseas, you'll need to make minimum repayments on your student loan or apply for a temporary repayment suspension. You'll be responsible for making these payments yourself, and they will no longer be taken from your salary or wages. You can set up regular weekly or monthly payments, and you'll receive an assessment notice each year that tells you the minimum payments you need to make. These payments are generally due by 30 September and 31 March.
There are several ways to make payments from overseas:
- Online money transfer agencies: You can use a money transfer agency such as OrbitRemit to pay online using your debit or credit card. Payments will be processed within 5 working days. If you're paying by credit card, you may be charged interest if you don't pay on time.
- Direct debit: If you live in Australia, the United Kingdom, Europe, Canada, or the United States, you can set up direct debit payments in your myIR account.
- Bank payments: You can make one-off payments or set up regular automatic payments from an Australian bank account using internet or telephone banking. Your bank may charge you for these services.
It's important to note that if you're away from New Zealand for more than 6 months, you will be considered overseas-based and your student loan will no longer be interest-free. Interest will be applied at a rate of 2.8%, calculated daily and added to your loan balance at the end of the tax year.
Israel's Smear Campaign: Students Paid $50K?
You may want to see also
Explore related products
Temporary repayment suspension
If you are a New Zealand citizen with a student loan, you will need to make minimum repayments on your loan when you are based overseas. However, you can apply for a temporary repayment suspension of up to 12 months.
To be considered a New Zealand-based borrower, you must be present in the country for at least 32 days in a 184-day period. If you are away from New Zealand for more than 6 months, you will be charged interest on your student loan. In this case, you may be allowed a temporary repayment suspension for up to 1 year. However, interest will continue to accrue on the loan during this period, so it is advisable to make voluntary repayments.
If you are granted a temporary repayment suspension, you will receive a notice of assessment 183 days after you leave New Zealand. This assessment will show a balance of $0.00 owing for the 12-month period of the suspension. Once the suspension period ends, you will need to resume repaying your student loan. If you are still overseas, your repayments will be based on your loan balance and will be due twice a year, on 30 September and 31 March.
You can apply for a temporary repayment suspension by logging into your student loan account on the myIR website and selecting 'More'. From there, you can navigate to the ''Travelling overseas' section and select 'Apply for a repayment suspension'. Alternatively, you can call the Inland Revenue Department to apply for the suspension.
Savings Accounts: Student Loan Payment Options
You may want to see also
Explore related products
Payment dates and deadlines
The length of time you are out of New Zealand for can affect how much interest is applied to your student loan and when repayments are due. If you are outside of New Zealand for around 5 out of 6 months, you might become overseas-based and your student loan will stop being interest-free. If you are present in New Zealand for 32 days or more in a 184-day period, you are a New Zealand-based borrower and will not be charged interest.
If you become overseas-based, your student loan will no longer be interest-free from the day after you left New Zealand. Interest will be applied to your student loan from the day after you left the country. Your loan repayments will be based on the balance of your loan at the time you left New Zealand. Your repayments are generally due by 30 September and 31 March. If one or both of these dates have passed by the time you are notified, these dates may be adjusted. The amount you initially need to pay by each due date depends on your loan balance when you first become overseas-based, which is the day after you leave New Zealand.
If you live in Australia, the United Kingdom, Europe, Canada, or the United States, you can set up direct debit payments in your myIR account. You can also set up a nominated person to help you keep up-to-date with your loan while you're overseas. They will be able to view and make updates to your student loan and any other account, depending on the permissions you grant them.
Students and Taxes: South Africa's Unique Scenario
You may want to see also
Explore related products
Payment amounts and loan balance
If you're living and working overseas and your income is above the repayment threshold, you must make repayments towards your New Zealand student loan. The amount you repay is based on your loan balance at the start of the current tax year (1 April). You can find your loan balance by logging into your myIR account.
The You may want to see also You can pay online using a money transfer agency called OrbitRemit. You can also set up direct debit payments in your myIR account if you live in Australia, the United Kingdom, Europe, Canada or the United States. The amount you need to pay depends on your loan balance when you first leave New Zealand. Your repayments are based on your total loan balance on 31 March each year you are overseas. You'll receive an assessment notice each year that tells you the minimum payments you need to make. Payments are generally due by 30 September and 31 March. It's recommended that you set up regular weekly or monthly payments. If you're away from New Zealand for up to 6 months, you're usually considered to be New Zealand-based and are entitled to an interest-free loan. If you're away for more than 6 months, you'll be charged interest on your loan. Yes, you may be allowed a temporary repayment suspension of up to 1 year if you're overseas. However, interest will continue to be charged on your loan, so it's a good idea to make voluntary repayments.Aboriginal Students and HECs: Who Pays?
Frequently asked questions
