First serious point is if you’re going overseas for 6 months or more your New Zealand student loan won’t be interest free.
Below is all the info you need including repayment amounts and a student loan repayment calculator.
On this page you will find the below helpful information:
If you travel outside New Zealand for more than six months the IRD don’t base your repayments on your income, they base the payments on your student loan balance and charge interest to the balance owing.
Each year you’re away the IRD will work out your repayment amounts again. Your new repayment amounts will be available after 31 March.
Your minimum annual repayment obligation as at:
You can make voluntary repayments anytime, but you must meet the installment dates of 30 September and 31 March.
Instalment date payments are 50% of your repayment obligation. This will only be different if you’ve made other arrangements with the IRD.
Your repayment obligation stays the same if your loan balance decreases. But, if your balance increases your repayment obligation will increase.
You can check what you owe and when your repayments are due in your myIR Secure Online Services account.
The below table shows how much you need to pay depending on your loan balance.
|When your loan balance is:||30 September||31 March|
|under $1,000||you need to pay your whole loan balance|
|$1,000 and up to $15,000|
|over $15,000 and up to $30,000|
|over $30,000 and up to $45,000|
|over $45,000 and up to $60,000|
Depending on the size of your loan (over $90,000) your repayments might not be enough to cover your interest.
When you leave New Zealand during the tax year you might have:
Use the IRD student loan repayment calculator to work out how much interest will be added to your loan and how long it’ll take to pay it off.
Below is an example using a student loan amount of $10,000:
If you’ve missed payments the IRD may charge you late payment interest. If you’re having difficulty repaying your loan contact the IRD. They might be able to offer you some payment options. Talk to them if:
Your loan will remain interest-free if you’re going overseas for 183 consecutive days or less (about 6 months) and you’ve have been living in New Zealand for at least 183 consecutive days prior to leaving. You’ll still see interest being applied but this is automatically written off.
If you’ll earn New Zealand salary or wages while you’re away, you’ll still be required to have student loan repayments deducted from this income.
If you earn any other income from New Zealand and/or overseas income while you’re away, you’ll need to let us know after the end of the tax year (31 March). This is because you’re still a New Zealand- based borrower and your repayments are based on your worldwide income.
If you have any other repayment obligation due while you’re away, or would like to make voluntary repayments, there are a number of ways you can make a payment.
When you go overseas:
You need to let us know if you’re going to be overseas for 184 days (about 6 months) or more. The easiest way to do this, if you also want to apply for a repayment holiday, is to complete the form in your myIR Secure Online Services account.
Otherwise send us secure mail through your myIR account or call us on 0800377778 (+64 3 951 2020 from overseas).
You need to include:
You’ll become an overseas-based borrower if you’ll be overseas for 184 days or more. This means you’ll have different repayment obligations and your loan will no longer be interest-free. Interest applies to your student loan from the day after you leave New Zealand.
There are certain situations where you may still qualify for an interest-free loan while you’re overseas.
In most cases you won’t qualify for an interest-free loan if you go overseas for 184 days (about 6 months) or more. However you may still qualify for your existing loan to remain interest-free if you meet the conditions for one of the following situations:
There are two additional circumstances where you may still qualify for your existing loan to remain interest-free:
You can apply for a repayment holiday if you’re going overseas for 6 months (184 days or more), which means you won’t have an overseas-based repayment obligation to pay for up to the first year (365 days) of being overseas. A repayment holiday is optional but you’ll need to apply if you want one.
The following conditions apply to repayment holiday applications:
If you don’t meet these conditions your application may be declined.
You can apply for the repayment holiday through your myIR account by completing the form.
Otherwise send us secure mail through your myIR account or call us on 0800377 778 (+64 3 951 2020 from overseas).
Please note: Repayment holidays don’t stop interest on your loan, so it’s still a good idea to make voluntary repayments to keep on top of your loan.
When you return to New Zealand after being overseas for 184 days (about 6 months) or more, you must let us know so we can update your student loan details and contact information.
With the enactment of the Student Loan Scheme Amendment Act 2014, changes to student loans will affect both New Zealand-based and overseas-based borrowers.
Changes to the overseas-based borrower repayment regime include two new annual repayment obligations in addition to the current overseas-based repayment thresholds. Borrowers with a loan balance over $45,000 will also need to repay more per year towards their loan.
A borrower’s annual repayment obligation will be set at a fixed minimum amount, which will no longer decrease as the borrowers’ loan balance decreases.
Stronger measures for those who have defaulted on their overseas-based repayment obligation
We can now request an arrest warrant to stop borrowers from leaving New Zealand next time they visit, if they are significantly behind on their overseas-based repayment obligation. Similar provisions already exist under the Child Support Act 1991.
If there is anything else you would like to know about, please ask me a question using the below comment system and I will do my best to find the information you need.