Does anyone have experience with having a student loan while working overseas? is it manageable?

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NglButiLoveTechnolog

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#302215 7-Nov-2022 18:18

Hey all,

So I've finished my studies last year and am wanting to move/relocate to Australia to work there. Was wondering if there is any New Zealands that's working in Australia while still having a student debt/loan? if so, was wondering how are you all managing to survive in terms of how much you're saving in your pocket when finish paying for expenses (such as rent, travelling, ISP internet, mobile prepay plan, grocery, lunch and dinner, electricity and gas, petrol, medical, student loan etc?)? I want to work in Australia while being able to have a happy life without having to stress and force myself to make a considerable huge amount of saving (reduce eating and spend money wisely). I don't drink though and no smoke.

I'l most likely work in the IT field as an entry person so the pay wouldn't be immediately high and don't plan on making any extra payments yet to my student loan. My student loan is $26k. Correct me if I'm wrong but, I understand that the overseas interest rate is 2.8% so my yearly payment will be $2,000.00 which means my total interest $7,522.27 depending on my salary.

Question: With all this information, I'm basically wanting to know if moving to Australia from NZ with a $26k student loan/debt and a entry level salary is manageable/survivable?

Any help would be much appreciated thanks.

duckDecoy

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#2993249 7-Nov-2022 18:32

The IRD have a student loan calculator you can pop your numbers into and select the Overseas option.

I threw your $26,000 into that at 2.8% and chose not to make any additional payments and it comes out to:

Compulsory repayments

Yearly payment $2,000.00

Loan term 16 years and 5 months

Total interest $6,958.41

I also went against what you said and added a mere $50 additional payments per fortnight and it comes out to:

With extra repayments

Yearly payment $3,300.00

Loan term 9 years and 1 month

Total interest $3,423.86

EDIT: FORMAT WENT WONKY FIRST ATTEMPT

NglButiLoveTechnolog

129 posts

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#2993253 7-Nov-2022 18:42

duckDecoy:

The IRD have a student loan calculator you can pop your numbers into and select the Overseas option.

I threw your $26,000 into that at 2.8% and chose not to make any additional payments and it comes out to:

Compulsory repayments

Yearly payment $2,000.00

Loan term 16 years and 5 months

Total interest $6,958.41

I also went against what you said and added a mere $50 additional payments per fortnight and it comes out to:

With extra repayments

Yearly payment $3,300.00

Loan term 9 years and 1 month

Total interest $3,423.86

EDIT: FORMAT WENT WONKY FIRST ATTEMPT

Nice and I appreciate you doing this. In terms of the additional payments per fortnight, what would you say is the sweet spot amount for a entry level worker if you dont mind me asking?

duckDecoy

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#2993264 7-Nov-2022 19:21

NglButiLoveTechnolog:

Nice and I appreciate you doing this. In terms of the additional payments per fortnight, what would you say is the sweet spot amount for a entry level worker if you dont mind me asking?

If it were me I would not make additional payments for the first 6 months or so until you get a feel for your cashflow situation. An additional 1.5k in your pocket when you are starting out can come in handy for something, and you're only saving 3.5k across the life of the loan which is small beans in the long run of 19 years (it may not feel small now, but it will).

If the interest rate sky rocketed in the future I would probably start making payments though as that could start to bite.

Personally I made the standard payments until the balance got to 8k and then I just whacked it off with an annual bonus cause I was sick of it hanging around, and interest was 8% at the time (from memory).

A friend of mine took a different approach. He went to the UK with a rather large loan, never paid a thing and got fines etc added. Every so often he'd make arrangements with IRD that he never followed through with and eventually the loan balance got to 150k+ He then declared himself bankrupt and pinko presto loan gone. Not saying i'd recommend it, but he seems pretty happy lol.

Lias

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#2993265 7-Nov-2022 19:21

NglButiLoveTechnolog:

Nice and I appreciate you doing this. In terms of the additional payments per fortnight, what would you say is the sweet spot amount for a entry level worker if you dont mind me asking?

So many variables.. Entry level worker in what though. Minimum wage? Entry level McDonalds worker cos you got a BA? Entry level Lawyer? Nurse? Doctor? Plumber? Data Entry? You're talking a range of 40kish up to double that or more depending on the qualification and the job. Also going to depend on your personal circumstances.. e.g. single.. partner.. kids.. no kids.. debts.. no debts.. etc.

As a general rule of thumb though, with anything interest bearing I'd say the sweet spot is "however much you can comfortably pay".

My 2 cents.

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