Student loans - while overseas low/nil income.

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Forums › Finance and wealth management › Student loans - while overseas low/nil income.

rayonline

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#129317 10-Sep-2013 16:31

What happens to people who have student loans and once they leave NZ, interest I know will be accumulated, instead of staying in NZ and acculating rent and other expenses while jobless what happens to those who go back overseas back home and doesn't have a job yet or they have a job say teaching english and the pay isn't that high to pay the interest or whatever that is required.

chiefie

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#892820 10-Sep-2013 16:36

Those are the question you should be ask IRD.

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Kingy

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#892821 10-Sep-2013 16:38

Don't quote me but I'm pretty sure the only difference between being in NZ and Overseas is that you get interest if you are gone longer than 6 months.

Also you don't have to re-pay your student loan unless you earn ~$20,000NZD per year. As soon as you go over that figure you'll need to pay 12% of your income towards your student loan.

I think that's how it works. Your best bet would be to ring IRD and discuss with them exactly how it works and what you'll need to do.

Edit: http://www.ird.govt.nz/studentloans/overseas/long-trip/ check out this page for some information. You can apply for a repayment holiday for up to a year if you don't think you'll be gone that long.

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ajobbins

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#892837 10-Sep-2013 17:24

When overseas, you repayment obligation is based on your loan balance not your income (as IRD can't assess and you are no longer a NZ tax resident).

You are required to make 2 payments per year (30 Sept and 30 April) of up to $1,500 each (depends on balance).

You may be eligible for a 1 year repayment holiday. Call IRD and ask.

You can also keep you loan interest free in some circumstances (such as studying overseas).

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lokhor

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#892871 10-Sep-2013 18:50

Kingy: Don't quote me but I'm pretty sure the only difference between being in NZ and Overseas is that you get interest if you are gone longer than 6 months.

Also you don't have to re-pay your student loan unless you earn ~$20,000NZD per year. As soon as you go over that figure you'll need to pay 12% of your income towards your student loan.

I think that's how it works. Your best bet would be to ring IRD and discuss with them exactly how it works and what you'll need to do.

Edit: http://www.ird.govt.nz/studentloans/overseas/long-trip/ check out this page for some information. You can apply for a repayment holiday for up to a year if you don't think you'll be gone that long.

It's 12 cents in the dollar (12%) for every dollar earned over $19,084 for NZ tax residens

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Kyanar

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#893024 11-Sep-2013 06:42

lokhor:
Kingy: Don't quote me but I'm pretty sure the only difference between being in NZ and Overseas is that you get interest if you are gone longer than 6 months.

Also you don't have to re-pay your student loan unless you earn ~$20,000NZD per year. As soon as you go over that figure you'll need to pay 12% of your income towards your student loan.

I think that's how it works. Your best bet would be to ring IRD and discuss with them exactly how it works and what you'll need to do.

Edit: http://www.ird.govt.nz/studentloans/overseas/long-trip/ check out this page for some information. You can apply for a repayment holiday for up to a year if you don't think you'll be gone that long.

It's 12 cents in the dollar (12%) for every dollar earned over $19,084 for NZ tax residens

Which is irrelevant if you're overseas for 184 days or more, as you automatically become an Overseas Based Borrower and get the reduced repayment requirements that entails (though why you'd pay less when it's incurring interest is a mystery).

Kingy

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#893047 11-Sep-2013 07:57

ajobbins: When overseas, you repayment obligation is based on your loan balance not your income (as IRD can't assess and you are no longer a NZ tax resident).

You are required to make 2 payments per year (30 Sept and 30 April) of up to $1,500 each (depends on balance).

You may be eligible for a 1 year repayment holiday. Call IRD and ask.

You can also keep you loan interest free in some circumstances (such as studying overseas).

I wasn't quite sure if it was based on income or not but it makes sense that it isn't.

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