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  Reply # 863500 22-Jul-2013 12:49
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The fact is that it will count against loans from lending institutes banks or others. Although it may seem like it doesn't it surely does as you are still liable to make repayments if earning over the threshold. This is no longer money you have to repay them so it does count against you.

Todays market is such that a lot of lenders want to throw money or goods at you on great terms as at the end of it all it is still a sale. If you default the goods whether it be a house or a tv or whatever are generally not worth the same (housing can obviously go up but if your bank takes it they're only interested in what you owe and will not care how little it sells for unless they're not making enough to repay themselves).

If you have the money pay it off early I did recently and man what a difference it made, more money in my wages, felt a lot better about finally having it gone. It really sucked seeing over $100 per pay period go back but at the end of the day I borrowed it so I repaid it.

Student Loan debt is increasing where does the Govt get that money from, overseas borrowing and taxes. How do they repay that??? By taxing us more. Schemes like Bonded Merit were introduced to stop borrowers going where the real money is and keep those skills and talents in NZ if even only for a short term it's a great thing to have those people who rack up large debts take their talents and skill sets overseas actually stay in NZ and use those things to help better our country.

Add to that by keeping them bonded to NZ for a while they also are repaying their loans back unlike a lot who disappear overseas.

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  Reply # 863515 22-Jul-2013 12:57
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jtbthatsme: The fact is that it will count against loans from lending institutes banks or others. Although it may seem like it doesn't it surely does as you are still liable to make repayments if earning over the threshold. This is no longer money you have to repay them so it does count against you.

This is true, but:
1) If you have built up a lump sum instead of paying off the loan, then you might not need a loan at all
2) Even if you think you might end up getting a loan at some point, you are still better off repaying the minimum, building up a lump sum and reaping interest. If one day you then find that you SL debt counts against you in a loan application, then you can pay off the loan with your lump sum (and the accrued interest).

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  Reply # 863531 22-Jul-2013 13:07
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The fundamental difference between a student loan versus private debt is that student loan repayments are tied to your income. So if, for example, you lose your job then you do not have to continue making repayments while you have no income.

From that perspective lenders would view a student loan as less of a financial risk than, say, a hire purchase debt.

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  Reply # 863574 22-Jul-2013 13:43
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alasta: The fundamental difference between a student loan versus private debt is that student loan repayments are tied to your income. So if, for example, you lose your job then you do not have to continue making repayments while you have no income.

From that perspective lenders would view a student loan as less of a financial risk than, say, a hire purchase debt.


The other very importent point is that a SL is tied to the person. From my understanding, if that person is in a relationship, and that person dies, the loan also dies with them, so the partner doesn't have to pay it. If they paid it off early, then they would have paid off more than they would have had to, when that relationship could have used that money to pay off interest payments on a house. A family friend was killed in an accident, and they had accrued a huge student loan, but I believe that all got wiped, so it didn't come out of their estate. However I don't think they had any savings anyway, so that probably made no difference. Perhaps someone else knows more about this side of it.

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  Reply # 863576 22-Jul-2013 13:46
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mattwnz:
alasta: The fundamental difference between a student loan versus private debt is that student loan repayments are tied to your income. So if, for example, you lose your job then you do not have to continue making repayments while you have no income.

From that perspective lenders would view a student loan as less of a financial risk than, say, a hire purchase debt.


The other very importent point is that a SL is tied to the person. From my understanding, if that person is in a relationship, and that person dies, the loan also dies with them, so the partner doesn't have to pay it. If they paid it off early, then they would have paid off more than they would have had to. A family friend was killed in an accident, and they had accrued a huge student loan, but I beleive that all got wiped, so it didn't come out of their estate. However I don't think they had any savings anyway, so that probably made no difference. Perhaps someone else knows more about this side of it.


yep - and hence my post earlier about repayment priorities should be after death and bankruptcy in anyone's bucket list

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